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The Marine Protection, Research, and Sanctuaries Act of 1972 (MPRSA, P.L. 92-532) has two basic aims: to regulate intentional ocean disposal of materials, and to authorize related research. Title I of the act, which is often referred to as the Ocean Dumping Act, contains permit and enforcement provisions for ocean dumping. Research provisions are contained in Title II; Title IV authorizes a regional marine research program; and Title V addresses coastal water quality monitoring. The third title of the MPRSA, which authorizes the establishment of marine sanctuaries, is not addressed here. This report presents a summary of the law, describing the essence of the statute. It is an excerpt from a larger document, CRS Report RL30798, Environmental Laws: Summaries of Major Statutes Administered by the Environmental Protection Agency . Descriptions of many details and secondary provisions are omitted here, and even some major components are only briefly mentioned. Further, this report describes the statute, but does not discuss its implementation. Table 1 shows the original enactment and subsequent amendments. Table 2 , at the end of this report, cites the major U.S. Code sections of the codified statute. The nature of marine pollution requires that it be regulated internationally, since once a pollutant enters marine waters, it knows no boundary. Thus, a series of regional treaties and conventions pertaining to local marine pollution problems and more comprehensive international conventions providing uniform standards to control worldwide marine pollution has evolved over the last 40 years. At the same time that key international protocols were being adopted and ratified by countries worldwide (in the early 1970s), the United States enacted the MPRSA to regulate disposal of wastes in marine waters that are within U.S. jurisdiction. It implements the requirements of the London Convention, which is the international treaty governing ocean dumping. The MPRSA requires the Environmental Protection Agency (EPA) Administrator, to the extent possible, to apply the standards and criteria binding upon the United States that are stated in the London Dumping Convention. This convention, signed by more than 85 countries, includes annexes that prohibit the dumping of mercury, cadmium, and other substances such as DDT and PCBs, solid wastes and persistent plastics, oil, high-level radioactive wastes, and chemical and biological warfare agents; and requires special permits for other heavy metals, cyanides and fluorides, and medium- and low-level radioactive wastes. The MPRSA uses a comprehensive and uniform waste management system to regulate disposal or dumping of all materials into ocean waters. Prior to 1972, U.S. marine waters had been used extensively as a convenient alternative to land-based sites for the disposal of various wastes such as sewage sludge, industrial wastes, and pipeline discharges and runoff. The basic provisions of the act have remained virtually unchanged since 1972, but many new authorities have been added. These newer parts include (1) research responsibilities for EPA; (2) specific direction that EPA phase out the disposal of "harmful" sewage sludges and industrial wastes; (3) a ban on the ocean disposal of sewage sludge and industrial wastes by December 31, 1991; (4) inclusion of Long Island Sound within the purview of the act; and (5) inclusion of medical waste provisions. Authorizations for appropriations to support provisions of the law expired at the end of FY1997 (September 30, 1997). Authorities did not lapse, however, and Congress has continued to appropriate funds to carry out the act. Four federal agencies have responsibilities under the Ocean Dumping Act: EPA, the U.S. Army Corps of Engineers, the National Oceanic and Atmospheric Administration (NOAA), and the Coast Guard. EPA has primary authority for regulating ocean disposal of all substances except dredged spoils, which are under the authority of the Corps of Engineers. NOAA is responsible for long-range research on the effects of human-induced changes to the marine environment, while EPA is authorized to carry out research and demonstration activities related to phasing out sewage sludge and industrial waste dumping. The Coast Guard is charged with maintaining surveillance of ocean dumping. Title I of the MPRSA prohibits all ocean dumping, except that allowed by permits, in any ocean waters under U.S. jurisdiction, by any U.S. vessel, or by any vessel sailing from a U.S. port. Certain materials, such as high-level radioactive waste, chemical and biological warfare agents, medical waste, sewage sludge, and industrial waste, may not be dumped in the ocean. Permits for dumping of other materials, except dredge spoils, can be issued by the EPA after notice and opportunity for public hearings where the Administrator determines that such dumping will not unreasonably degrade or endanger human health, welfare, the marine environment, ecological systems, or economic potentialities. The law regulates ocean dumping within the area extending 12 nautical miles seaward from the U.S. baseline and regulates transport of material by U.S.-flagged vessels for dumping into ocean waters. EPA designates sites for ocean dumping and specifies in each permit where the material is to be disposed. EPA is required to prepare an annual report of ocean dumping permits for material other than dredged material. In 1977, Congress amended the act to require that dumping of municipal sewage sludge or industrial wastes that unreasonably degrade the environment cease by December 1981. (However, that deadline was not achieved, and amendments passed in 1988 extended the deadline to December 1991.) In 1986, Congress directed that ocean disposal of all wastes cease at the traditional 12-mile site off the New York/New Jersey coast (that is, it barred issuance of permits at the 12-mile site) and directed that disposal be moved to a new site 106 miles offshore. In 1988, Congress enacted several laws amending the Ocean Dumping Act, with particular emphasis on phasing out sewage sludge and industrial waste disposal in the ocean, which continued despite earlier legislative efforts. In 1992, Congress amended the act to permit states to adopt ocean dumping standards more stringent than federal standards and to require that permits conform with long-term management plans for designated dumpsites, to ensure that permitted activities are consistent with expected uses of the site. Virtually all ocean dumping that occurs today is dredged material, sediments removed from the bottom of waterbodies in order to maintain navigation channels and port berthing areas. Other materials that are dumped include vessels, fish wastes, and human remains. The Corps of Engineers issues permits for ocean dumping of dredged material, using EPA's environmental criteria and subject to EPA's concurrence. The bulk of dredged material disposal results from maintenance dredging by the Corps itself or its contractors. According to data from the Corps, amounts of dredged material sediment that are disposed each year at designated ocean sites fluctuate, averaging in recent years about 47 million cubic yards. Before sediments can be permitted to be dumped in the ocean, they are evaluated to ensure that the dumping will not cause significant harmful effects to human health or the marine environment. EPA is responsible for developing criteria to ensure that the ocean disposal of dredge spoils does not cause environmental harm. Permits for ocean disposal of dredged material are to be based on the same criteria utilized by EPA under other provisions of the act, and to the extent possible, EPA-recommended dumping sites are used. Where the only feasible disposition of dredged material would violate the dumping criteria, the Corps can request an EPA waiver. Amendments to MPRSA enacted in 1992 expanded EPA's role in permitting of dredged material by authorizing EPA to impose permit conditions or even deny a permit, if necessary to prevent environmental harm to marine waters. Permits issued under the Ocean Dumping Act specify the type of material to be disposed, the amount to be transported for dumping, the location of the dumpsite, the length of time the permit is valid, and special provisions for surveillance. The EPA Administrator can require a permit applicant to provide information necessary for the review and evaluation of the application. In addition to issuing individual permits for non-dredged material, EPA has issued general permits under the MPRSA for several types of disposal activities, such as burial at sea of human remains, transportation and disposal of vessels, and disposal of manmade ice piers in Antarctica. The act authorizes EPA to assess civil penalties of not more than $50,000 for each violation of a permit or permit requirement, taking into account such factors as gravity of the violation, prior violations, and demonstrations of good faith; however, no penalty can be assessed until after notice and opportunity for a hearing. Criminal penalties (including seizure and forfeiture of vessels) for knowing violations of the act also are authorized. In addition, the act authorizes penalties for ocean dumping of medical wastes (civil penalties up to $125,000 for each violation and criminal penalties up to $250,000, five years in prison, or both). The Coast Guard is directed to conduct surveillance and other appropriate enforcement activities to prevent unlawful transportation of material for dumping, or unlawful dumping. Like many other federal environmental laws, the Ocean Dumping Act allows individuals to bring a citizen suit in U.S. district court against any person, including the United States, for violation of a permit or other prohibition, limitation, or criterion issued under Title I of the act. In conjunction with the Ocean Dumping Act, the Clean Water Act (CWA) regulates all discharges into navigable waters including the territorial seas. Although these two laws overlap in their coverage of dumping from vessels within the territorial seas, any question of conflict is essentially moot because EPA has promulgated a uniform set of standards (40 CFR Parts 220-229). The Ocean Dumping Act preempts the CWA in coastal waters or open oceans, and the CWA controls in estuaries. States are permitted to regulate ocean dumping in waters within their jurisdiction under certain circumstances. Title II of the MPRSA authorizes two types of research: general research on ocean resources, under the jurisdiction of NOAA; and EPA research related to phasing out ocean disposal activities. NOAA is directed to carry out a comprehensive, long-term research program on the effects not only of ocean dumping, but also of pollution, overfishing, and other human-induced changes on the marine ecosystem. Additionally, NOAA assesses damages from spills of petroleum and petroleum products. EPA's research role includes "research, investigations, experiments, training, demonstrations, surveys, and studies" to minimize or end the dumping of sewage sludge and industrial wastes, along with research on alternatives to ocean disposal. Amendments in 1980 required EPA to study technological options for removing heavy metals and certain organic materials from New York City's sewage sludge. Title IV of the MPRSA established nine regional marine research boards for the purpose of developing comprehensive marine research plans, considering water quality and ecosystem conditions and research and monitoring priorities and objectives in each region. The plans, after approval by NOAA and EPA, are to guide NOAA in awarding research grant funds under this title of the act. Title V of the MPRSA established a national coastal water quality monitoring program. It directs EPA and NOAA jointly to implement a long-term program to collect and analyze scientific data on the environmental quality of coastal ecosystems, including ambient water quality, health and quality of living resources, sources of environmental degradation, and data on trends. Results of these activities (including intensive monitoring of key coastal waters) are intended to provide information necessary to design and implement effective programs under the Clean Water Act and Coastal Zone Management Act.

The Marine Protection, Research, and Sanctuaries Act (MPRSA) has two basic aims: to regulate intentional ocean disposal of materials, and to authorize related research. Permit and enforcement provisions of the law are often referred to as the Ocean Dumping Act. The basic provisions of the act have remained virtually unchanged since 1972, when it was enacted to establish a comprehensive waste management system to regulate disposal or dumping of all materials into marine waters that are within U.S. jurisdiction, although a number of new authorities have been added. This report presents a summary of the law. Four federal agencies have responsibilities under the Ocean Dumping Act: the Environmental Protection Agency (EPA), the U.S. Army Corps of Engineers, the National Oceanic and Atmospheric Administration (NOAA), and the Coast Guard. EPA has primary authority for regulating ocean disposal of all substances except dredged spoils, which are under the authority of the Corps of Engineers. NOAA is responsible for long-range research on the effects of human-induced changes to the marine environment, while EPA is authorized to carry out research and demonstration activities related to phasing out sewage sludge and industrial waste dumping. The Coast Guard is charged with maintaining surveillance of ocean dumping. Title I of the MPRSA prohibits all ocean dumping, except that allowed by permits, in any ocean waters under U.S. jurisdiction, by any U.S. vessel, or by any vessel sailing from a U.S. port. Certain materials, such as high-level radioactive waste, chemical and biological warfare agents, medical waste, sewage sludge, and industrial waste, may not be dumped in the ocean. Permits for dumping of other materials, except dredge spoils, can be issued by the EPA after notice and opportunity for public hearings where the Administrator determines that such dumping will not unreasonably degrade or endanger human health, welfare, the marine environment, ecological systems, or economic potentialities. Permits specify the type of material to be disposed, the amount to be transported for dumping, the location of the dumpsite, the length of time the permit is valid, and special provisions for surveillance. The law regulates ocean dumping within the area extending 12 nautical miles seaward from the U.S. baseline and regulates transport of material by U.S.-flagged vessels for dumping into ocean waters. EPA designates sites for ocean dumping and specifies in each permit where the material is to be disposed. Title II of the MPRSA authorizes two types of research: general research on ocean resources, under the jurisdiction of NOAA; and EPA research related to phasing out ocean disposal activities. NOAA is directed to carry out a comprehensive, long-term research program on the effects not only of ocean dumping, but also of pollution, overfishing, and other human-induced changes on the marine ecosystem. EPA's research role includes "research, investigations, experiments, training, demonstrations, surveys, and studies" to minimize or end the dumping of sewage sludge and industrial wastes, along with research on alternatives to ocean disposal. (Title III, concerning marine sanctuaries, is not discussed in this report.) Title IV of the MPRSA established nine regional marine research boards for the purpose of developing comprehensive marine research plans, considering water quality and ecosystem conditions and research and monitoring priorities and objectives in each region. Title V of the MPRSA established a national coastal water quality monitoring program. It directs EPA and NOAA jointly to implement a long-term program to collect and analyze scientific data on the environmental quality of coastal ecosystems, including ambient water quality, health and quality of living resources, sources of environmental degradation, and data on trends.

The Philippine Islands became a U.S. possession in 1898, when they were ceded from Spain following the Spanish-American War (1898-1902). In 1934, Congress passed the Philippine Independence Act (Tydings-McDuffie Act, P.L. 73-127), which set a 10-year timetable for the eventual independence of the Philippines and in the interim established a Commonwealth of the Philippines vested with certain powers over its internal affairs. In 1935, the Philippine Constitution was adopted and the first President of the Philippines was elected. The granting of full independence was ultimately delayed until 1946 because of the Japanese occupation of the Islands from 1942-1945. Among other things, P.L. 73-127 reserved to the United States the power to maintain military bases and armed forces in the Philippines and, upon order of the President of the United States, the right to call into the service of the U.S. Armed Forces all military forces organized by the Philippine government. On July 26, 1941, President Franklin D. Roosevelt issued an executive order inducting all military forces of the Commonwealth of the Philippines under the command of a newly created command structure called the United States Armed Forces of the Far East (USAFFE). These units remained under USAFFE command through the duration of World War II (WWII), until authority over them was returned to the Commonwealth at the time of independence. From time to time since 1946, Congress has passed laws providing, and in some instances repealing, benefits to Filipino veterans. This report, which will be updated as legislative events warrant, provides an overview of major Filipino veterans legislation enacted by Congress since 1946. The report begins by defining the specific groups of Filipino nationals who served under the command of the United States, outlines the Rescission Acts of 1946, the changes to benefits for Filipino veterans since 1946, and recent legislative proposals. Table 1 , at the end of this report, shows the current benefits for Filipino veterans and survivors. These were soldiers who enlisted as Philippine Scouts prior to October 6, 1945. They were members of a small, regular component of the U.S. Army that was considered to be in regular active service. The Regular Philippine Scouts were part of the U.S. Army throughout their existence, and are entitled to all benefits administered by the Department of Veterans Affairs (VA) by the same criteria that apply to any veteran of U.S. military service. These soldiers enlisted in the organized military forces of the Government of the Philippines under the provisions of the Philippine Independence Act of 1934. They served before July 1, 1946, while such forces were in the service of the U.S. Armed Forces pursuant to the military order of the President of the United States dated July 26, 1941. These were individuals who served in resistance units recognized by, and cooperating with, the U.S. Armed Forces during the period April 20, 1942, to June 20, 1946. They served primarily during the Japanese occupation of the Islands. Following reoccupation of the Islands by the U.S. Armed Forces, they became a recognized part of the Commonwealth Army of the Philippines by order of the President of the Philippines. These were Philippine citizens who served with the U.S. Armed Forces with the consent of the Philippine government between October 6, 1945, and June 30, 1947, and who were discharged from such service under conditions other than dishonorable. Since these scouts were recruited as a result of the Armed Forces Voluntary Recruitment Act of 1945 (P.L. 79-190), they are referred to as "New" Scouts. In 1946, Congress passed the first Supplemental Surplus Appropriation Rescission Act (P.L. 79-301) and the second Supplemental Surplus Appropriation Rescission Act (P.L. 79-391), which came to be commonly known as the "Rescission Acts of 1946." It should be noted that the Rescission Acts of 1946 applied only to Filipino veterans who were members of the Commonwealth Army of the Philippines, Recognized Guerrilla Forces, or the New Philippine Scouts. Veterans who served as Regular, or "Old," Philippine Scouts were categorized as U.S. veterans. They were, and remain, generally entitled to all veterans' benefits for which any other U.S. veteran is eligible. Enacted on February 18, 1946, P.L. 79-301 authorized a $200 million appropriation to the Commonwealth Army of the Philippines with a provision limiting benefits for these veterans to: (1) compensation for service-connected disabilities or death; and (2) National Service Life Insurance contracts already in force. Furthermore, this provision included bill language stating that Service before July 1, 1946, in the organized military forces of the government of the Commonwealth of the Philippines while such forces were in the service of the Armed Forces of the United States pursuant to the military order of the President, dated July 26, 1941 ... shall not be deemed to have been active military, naval or air service for the purposes of any law of the United States conferring rights, privileges, or benefits upon any person by reason of the service of such person or the service of any other person in the Armed Forces. Because of differences between economic conditions and living standards in the United States and the Philippines, P.L. 79-301 also provided that any benefits paid to Commonwealth Army veterans would be paid at the rate of one Philippine peso to each dollar for a veteran who was a member of the U.S. Armed Forces, with the assumption that one peso would obtain for Philippine veterans in the Philippine economy the equivalent of $1 of goods and services for American veterans in the American economy. Prior to the enactment of P.L. 79-301, Commonwealth Army veterans were determined by the then Veterans' Administration to be eligible for U.S. veterans' benefits. Enacted on May 27, 1946, P.L. 79-391 provided that service in the Philippine Scouts (the New Philippine Scouts) under Section 14 of the Armed Forces Voluntary Recruitment Act of 1945 (P.L. 79-190) shall not be deemed to have been active military or air service for the purpose of any laws administered by the Veterans' Administration. There is little background information on the intent of Congress in passing the first Rescission Act, as it affects veterans of the Commonwealth Army. However, statements made by Senator Carl Hayden during hearings on the second Rescission Act, which affected New Philippine Scouts, provide some indication of legislative intent in the passage of the first Rescission Act, and to the subsequent passage of the second Rescission Act. Furthermore, other events at the time may provide some context in which the Rescission Acts were considered. At the end of World War II, when Congress was considering a $200 million appropriation for the support of the Philippine Army, Senator Carl Hayden of the Senate Committee on Appropriations sent a letter to General Omar Bradley, then Director of the Veterans' Administration, requesting information concerning the status of the Filipino servicemen and the potential cost of their veterans benefits. In his response to the committee, General Bradley indicated that the total cost of paying veterans' benefits to members of the Philippine Commonwealth Army and their dependents, under then existing veterans' laws, would amount in the long run (75 years) to about $3 billion. It seems clear from Senator Hayden's statements that the passage of the first Rescission Act was meant to balance competing financial interests by providing some benefits, such as pensions for service-connected disability or death, while at the same time reducing the U.S. liability for future benefits. To accomplish this, Senator Hayden, Senator Russell and Senator Brooks included language by way of an amendment to the first Rescission bill stating that service by members of the Commonwealth Army was not considered active military, naval, or air service in the U.S. Armed Forces. Furthermore, hearings on the second Rescission Act also clearly indicate that it was Congress's intent to limit wartime benefits given to New Philippine Scouts: Because neither the President nor the Congress has declared an end to the war, a [New] Philippine Scout upon separation from service would be entitled to the same benefits as an American soldier who served in time of war. Unless this amendment [to the second Rescission Act] is adopted, a [New Philippine] Scout would be entitled to claim every advantage provided for the G.I. bill of rights such as loans, education, unemployment compensation, hospitalization, domiciliary care and other benefits provided by the laws administered by the Veterans' Administration. Because hostilities have actually ceased, the amendment makes it perfectly clear that these wartime benefits do not apply and that the 50,000 men now authorized to be enlisted in the [New] Philippine Scouts will be entitled only to pensions resulting from service-connected disability or service-connected death. In addition, the passage of the Rescission Acts may have been influenced by other bills under consideration by Congress at that time. In 1946, Congress passed the Philippine Rehabilitation Act (P.L. 79-370) and the Philippine Trade Act (P.L. 79-371). The terms of the Rehabilitation Act required the United States to pay claims for rehabilitation of the Philippines and war damage claims up to $620 million. Of this sum, $220 million was allocated for repair of public property. The remaining $400 million was allocated for war damage claims of individuals and associations. The Philippine Trade Act provided for free trade between the United States and the Philippines until July 3, 1954. These bills under consideration at the time would have provided economic stability to the newly emerging nation. According to Senator Hayden: As I see it, the best thing the American government can do is to help the Filipino people to help themselves. Where there was a choice between expenditures for the rehabilitation of the economy of the Philippine Islands and payments in cash to Filipino veterans, I am sure it is better to spend any equal sum of money, for example, on improving the roads and port facilities. What the Filipino veteran needs is steady employment rather than to depend for his living upon a monthly payment sent from the United States. Therefore, it seems clear that Congress considered the Rescission Acts in the context of providing for the comprehensive economic development of the soon to be sovereign Republic of the Philippines. Enacted on July 1, 1948, P.L. 80-865 authorized aid not to exceed $22.5 million for the construction and equipping of a hospital in the Philippines to provide care for Commonwealth Army veterans and Recognized Guerrilla Forces. P.L. 80-865 also authorized $3.3 million annually for a five-year grant program to reimburse the Republic of the Philippines for the care and treatment of service-connected conditions of those veterans. In 1951, plans for a new hospital were completed, and construction of a new hospital began in 1953. Work was completed at a total cost of $9.4 million, and the hospital was dedicated on November 20, 1955. This facility came to be known as the Veterans Memorial Medical Center (VMMC), and the facility was turned over to the Philippine government. The hospital is now organized under the Philippine Department of National Defense. Enacted on April 9, 1952, P.L. 82-311 authorized the President to transfer the United States Army Provisional Philippine Scout Hospital at Fort McKinley, Philippines, including all the equipment contained in the hospital, to the Republic of the Philippines. P.L. 82-311 also authorized a five-year grant program to reimburse the Republic of the Philippines for the medical care of Regular Philippine Scouts undergoing treatment at the United States Army Provisional Philippine Scout Hospital. Enacted on June 18, 1954, P.L. 83-421 extended the five-year grant program for an additional five years, through June 30, 1958, and authorized payments of $3 million for the first year, and then payments decreasing by $500,000 each year. No change was made to the provision stating that funds could be used for either medical care on a contract basis or for hospital operations. The VMMC was originally intended to provide care for service-connected conditions only. However, P.L. 85-461 enacted on June 18, 1958, expanded its use to include veterans of any war for any nonservice-connected disability if such veterans were unable to defray the expenses of necessary hospital care. The VA was authorized to pay for such care on a contract basis. P.L. 85-461 also authorized the President, with the concurrence of the Republic of the Philippines, to modify the agreement between the United States and the Philippines with respect to hospital and medical care for Commonwealth Army veterans, and Recognized Guerrilla Forces. The law stated that in lieu of any grants made after July 1, 1958, the VA may enter into a contract with the VMMC under which the United States would pay for hospital care in the Republic of the Philippines for Commonwealth Army veterans and Recognized Guerrilla Forces determined by the VA to need such hospital care for service-connected disabilities. P.L. 85-461 also required that the contract must be entered into before July 1, 1958, would be for a period of not more than five consecutive fiscal years beginning July 1, 1958, and shall provide for payments for such hospital care at a per diem rate to be jointly determined for each fiscal year by the two governments to be fair and reasonable. P.L. 85-461 also authorized the Republic of the Philippines to use at their discretion beds, equipment, and other facilities of the VMMC at Manila, not required for hospital care of Commonwealth Army veterans with service-connected disabilities, for the care of other persons. Enacted on June 13, 1963, P.L. 88-40 extended the grant program for another five years, through June 30, 1968. Under provisions of P.L. 88-40, costs for any one fiscal year were not to exceed $500,000. Enacted on September 30, 1966, P.L. 89-612 expanded the grant program to include hospital care at the VMMC for Commonwealth Army veterans, determined by the VA to need such care for nonservice-connected disabilities if they were unable to defray the expenses of such care. P.L. 89-612 also authorized the provision of hospital care to New Philippine Scouts for service-connected disabilities, and for nonservice-connected conditions if they were enlisted before July 4, 1946, the date of Philippine independence. P.L. 89-612 also authorized $500,000 for replacing and upgrading equipment and for restoring the physical plant of the hospital. P.L. 89-612 also provided an annual appropriation of $100,000 for six years, beginning in 1967, for grants to the VMMC for medical research and training of health service personnel. Enacted on August 1, 1973, P.L. 93-82 authorized nursing home care for eligible Commonwealth Army veterans and New Philippine Scouts. P.L. 93-82 also provided that available beds, equipment, and other facilities at the VMMC could be made available, at the discretion of the Republic of the Philippines, for other persons, subject to: (1) priority of admissions and hospitalizations given to Commonwealth Army veterans or New Philippine scouts needing hospital care for service-connected conditions; and (2) the use of available facilities on a contract basis for hospital care or medical services for persons eligible to receive care from the VA. P.L. 93-82 also authorized funding of up to $2 million annually for medical care, and provided for annual grants of up to $50,000 for education and training of health service personnel at the VMMC, and of up to $50,000 for replacing and upgrading equipment and maintaining the physical plant. Enacted on November 3, 1981, P.L. 97-72 made substantial changes to then existing law. P.L. 97-72 amended section 632 [now 1732] of Title 38 "to make it explicitly clear that it is the position of the United States that the primary responsibility for providing medical care and treatment for Commonwealth Army veterans and New Philippine Scouts rests with the Republic of the Philippines." The committee report accompanying P.L. 97-72 stated the long-standing position of Congress with regard to health care for Filipino veterans: There is little doubt that in 1948 when Congress enacted P.L. 80-865, authorizing a 5-year grant program to provide medical benefits to Filipino veterans with service-connected illnesses, including the authorization for constructing and equipping a hospital in Luzon, it intended that this program be temporary and that the Philippine government would eventually assume responsibility for funding the program and operations of the hospital.... These grants were renewed for an additional 5 years in 1954, but on a decreasing annual scale of payments (P.L. 83-421). The Committee report on this bill stated that progressively reducing these grants over five years was to make clear the intent of Congress that the Philippine government would be expected to gradually assume full responsibility for the hospital.... However, because of the moral obligation of the United States to provide care for Filipino veterans and the concern that the Philippine government would not be able to maintain a high standard of medical care to these veterans if assistance by the United States were withheld, this program was extended in 5-year increments through [FY] 1978. P.L. 89-612, enacted in September 1966, expanded the program to include medical care for nonservice-connected disabilities if the veteran were unable to defray the expense of medical care and included New Philippine Scouts in the coverage. Furthermore, P.L. 97-72 gave the VA the authority to contract for the care and treatment of U.S. veterans in the VMMC, and to provide grant authority of $500,000 per year for a period of five years for making grants to the VMMC to assist in the replacement and upgrading of equipment and the rehabilitation of the physical plant and facilities of the center. The grant program was further authorized by making amendments to the grant amount and the time frame for entering into contracts by the following acts: P.L. 100-687 , enacted on November 18, 1988; Department of Veterans Affairs Health-Care Personnel Act of 1991 ( P.L. 102-40 ), enacted on May 7, 1991; Veterans' Benefits Improvement Act of 1991 ( P.L. 102-86 ), enacted on August 14, 1991; and Veterans Health Care Act of 1992 ( P.L. 102-585 ), enacted on November 4, 1992. In 1993, the VA discontinued referrals of U.S. veterans to the VMMC, because the VA determined that the VMMC was not providing a reasonable standard of care. Until this time, the VMMC had been the primary contract hospital for the VA in the Philippines. Because of this change in the referral process, the grant-in-aid funding for the VMMC was last authorized by P.L. 102-585 through September 30, 1994, and the program was allowed to expire. However, Congress continued to appropriate funds for the program through September 30, 1996. During a tour of the VMMC in May 2006, the VA Secretary announced that "the VMMC will receive a grant of $500,000, or approximately 25.5 million pesos, from the U.S. government to help the institution purchase additional equipment and materials for the treatment of Filipino veterans." The VA currently provides grants of equipment under the authority of 38 U.S.C. SS1731. Enacted on April 25, 1951, P.L. 82-21 authorized funeral and burial benefits, including burial flags, for Commonwealth Army veterans residing in the Philippines (at half the rate of U.S. veterans). These benefits were not extended to New Philippine Scouts. Enacted on September 30, 1966, P.L. 89-613 extended dependents' and survivors' education assistance to include children of Commonwealth Army veterans and New Philippine Scouts. These benefits were made payable at half the rate of the benefits for children of U.S. veterans. As a result of a Joint Republic of the Philippines-U.S. Commission study of Philippine veterans' problems, P.L. 89-641, enacted on October 11, 1966 changed how benefits were to be computed by providing for the payment of benefits in pesos based on pesos being equal in value to U.S. 50 cents for each U.S. dollar authorized. In 1978, testifying before the Senate Committee on Appropriations, the General Accounting Office (now the Government Accountability Office) stated that [T]he intent of the 1966 law was apparently to restore Philippines beneficiaries to approximately their situation in 1946, taking into account the changes occurring in the economies and living standards in the Philippines and the U.S. since 1946. Since the law was enacted, however, legislative increases and devaluations of the peso have provided Filipino veterans with undue increases in benefits and has resulted in Filipino veterans achieving much higher levels of benefits than their counterparts in the U.S. Enacted on December 12, 1999, P.L. 106-169 expanded U.S. income-based benefits to certain World War II veterans, including Filipino veterans, who served in the organized military forces of the Philippines while those forces were in the service of the U.S. Armed Forces. Until the enactment of this act, recipients of Supplemental Security Income (SSI) were generally required to reside in the United States to maintain their eligibility. This law enabled eligible Filipino veterans to return to the Philippines and retain 75% of their SSI benefits. Enacted on October 27, 2000, P.L. 106-477 changed the rate of compensation payments to veterans of the Commonwealth Army of the Philippines and veterans of Recognized Guerrilla Forces who lawfully reside in the United States. P.L. 106-377 also authorized the VA to provide hospital care, medical services, and nursing home care to these two veterans groups, similar to care and services available to U.S veterans. In order to receive these benefits, they were required to be legal permanent residents of the United States and be receiving VA disability compensation. P.L. 106-377 , also authorized outpatient care at the Manila VA Outpatient Clinic to service-connected U.S. veterans for their nonservice-connected disabilities. Prior to the enactment of P.L. 106-377 , the VA was limited to providing outpatient treatment for U.S. veterans in the Philippines only for their service-connected conditions. Enacted on November 1, 2000, P.L. 106-419 changed the amount of monetary burial benefits that the VA will pay to survivors of veterans of the Philippine Commonwealth Army and Recognized Guerrilla Forces who lawfully reside in the United States at the time of death. Enacted on December 6, 2003, P.L. 108-170 authorized the VA to provide hospital care, nursing home care, and outpatient medical services to Filipino Commonwealth Army veterans, veterans of Recognized Guerrilla Forces, and New Philippine Scouts. Currently, these groups of veterans are eligible for hospital care, nursing home care, and outpatient medical services within the United States. Enacted on December 16, 2003, P.L. 108-183 added service in the New Philippine Scouts as qualifying service for payment of disability compensation, dependency, and indemnity compensation (DIC) and monetary burial benefits at the full-dollar rate, and provided for payment of DIC at the full-dollar rate to survivors of veterans of the Philippine Commonwealth Army and Recognized Guerrilla Forces who lawfully reside in the United States. It should be noted that veterans of the U.S. Armed Forces have the same entitlement to monetary benefits in the Philippines that they would have in the United States, with the exception of home loans and related programs, which are not available in the Philippines. Table 1 provides a summary of benefits currently available to Filipino veterans and survivors by category of service (Regular Philippine Scouts, Commonwealth Army of the Philippines, Recognized Guerilla Forces, and New Philippine Scouts). H.R. 760 and S. 57 would have eliminated the distinction between the Regular or "Old" Philippine Scouts and the other three groups of veterans--Commonwealth Army of the Philippines, Recognized Guerrilla Forces, and New Philippine Scouts--making them all fully eligible for VA benefits similar to those received by U.S. veterans. H.R. 760 was reported out of committee. S. 66 would have required the Secretary of the Army to validate claims by Filipinos that they performed military service in the Philippine Islands during World War II that would qualify them for benefits under U.S. law and issue a certificate of service. S. 1315 , as passed by the Senate, incorporated provisions from S. 57 . S. 1315 would have altered current law to deem certain service with Philippine forces during World War II as active service and establish rates for the Improved Pension and the Death Pension for veterans who served with the Philippine forces and their survivors living outside the United States. Under the provisions of S. 1315 , single Filipino veterans living outside the United States would receive $3,600 a year, married veterans would receive $4,500 a year, and veterans' survivors would receive $2,400 a year. However, under the bill, veterans living outside the United States who are eligible for, or receiving, the Social Security benefit for World War II veterans living overseas would not be not eligible for the new Improved Pension rates. The bill also would not have applied the current income or net worth limitations for the Improved Pension and the Death Pension for veterans who served with the Philippine forces and their survivors living outside the United States. In addition, the bill would not have required any veteran who served with the Philippine forces or their survivors receiving other federal benefits at the time of enactment to apply for the Improved Pension or the Death Pension if receiving the new benefits would have made them ineligible for their other federal benefits or reduced the amount of their other federal benefits. S. 1315 provided that disability compensation (for service-connected disabilities) would be paid to all recipients at the same rate regardless of residence, while maintaining the general payment rate of 50 cents per dollar for other benefits to Filipino veterans and survivors living outside the United States. On September 22, 2008, the House passed an amended version of S. 1315 that did not contain the Filipino benefit provisions. H.R. 6897 , as passed by the House on September 23, 2008, would have provided a one-time payment to Filipino veterans who served in the Commonwealth Army of the Philippines, Recognized Guerrilla Forces, and New Philippine Scouts. The payment would be $15,000 for U.S. citizens and $9,000 for non-U.S citizens. Payments are made from the Filipino Veterans Equity Compensation Fund and are subject to funds being available (appropriated). P.L. 110-329 appropriated $198 million for the Filipino Veterans Equity Compensation Fund. The American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ) authorizes a one-time payment from the Filipino Veterans Equity Compensation Fund to Filipino veterans who served in the Commonwealth Army of the Philippines, Recognized Guerrilla Forces, and New Philippine Scouts. The one-time payment is $15,000 for U.S. citizens and $9,000 for non-U.S citizens. Filipino veterans currently receiving benefits will continue to receive those benefits. The one-time payment does not impact eligibility for federally assisted programs. The one-time payment is considered a settlement for all future claims for benefits based on service in the Commonwealth Army of the Philippines, Recognized Guerrilla Forces, and New Philippine Scouts. The exception is that a veteran may receive benefits that the veteran would have been eligible for based on the laws in effect on the day before enactment (September 17, 2009).

The United States has had a continuous relationship with the Philippine Islands since 1898, when they were acquired by the United States as a result of the Spanish-American War. Filipinos have served in, and with, the U.S. Armed Forces since the Spanish-American War, and especially during World War II. The Islands remained a possession of the United States until 1946. Since 1946, Congress has passed several laws affecting various categories of Filipino veterans. Many of these laws have been liberalizing laws that have provided Filipino World War II veterans with medical and monetary benefits similar to benefits available to U.S. veterans. However, not all veterans' benefits are available to veterans of the Commonwealth Army of the Philippines, Recognized Guerrilla Forces, and New Philippine Scouts. In the 110th Congress, two measures, H.R. 760 and S. 57, have been introduced that would eliminate the distinction between the Regular, or "Old," Philippine Scouts and the other three groups of veterans--the Commonwealth Army of the Philippines, Recognized Guerrilla Forces, and New Philippine Scouts--making them all fully eligible for veterans' benefits similar to those received by U.S. veterans. This report defines the four specific groups (Regular Philippine Scouts, Commonwealth Army of the Philippines, Recognized Guerilla Forces, and New Philippine Scouts) of Filipino nationals who served under the command of the United States, outlines the Rescission Acts of 1946, benefit changes since 1946, current benefits for Filipino veterans by group, and recent legislative proposals and legislation, including the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5). It will be updated as legislative events warrant.

Congress established a statutory formula governing distribution of financial aid for municipal wastewater treatment in the Clean Water Act (CWA) in 1972. Since then, Congress has modified the formula and incorporated other eligibility changes five times, actions which have been controversial on each occasion. Federal funds are provided to states through annual appropriations according to the statutory formula to assist local governments in constructing wastewater treatment projects in compliance with federal standards. Congress has appropriated more than $91 billion since 1972. The formula originally applied to the act's program of grants for constructing such projects. That grants program was replaced in the law in 1987 by a new program of federal grants to capitalize state revolving loan funds (SRFs) for similar activities. The most recent formula change, also enacted in 1987, continues to apply to federal capitalization grants for clean water SRFs. The current state-by-state allotment is a complex formulation consisting basically of two elements, state population and "need." The latter refers to states' estimates of capital costs for wastewater projects necessary for compliance with the act. Funding needs surveys have been done since the 1960s and became an element for distributing CWA funds in 1972. The Environmental Protection Agency (EPA), in consultation with states, has prepared 15 clean water needs surveys since then to provide information to policymakers on the nation's total funding needs, as well as needs for certain types of projects. Legislation to fund water infrastructure projects has been on Congress's agenda regularly since the 107 th Congress. The 113 th Congress enacted some changes to the SRF provisions of the CWA in Title V of the Water Resources Reform and Development Act of 2014 (WRRDA, P.L. 113-121 ). These amendments did not modify the existing allotment formula, but requested EPA to conduct a review of the current allotment formula and submit a report to Congress. In part because the formula is more than 25 years old, while needs and population have changed, the issue of state-by-state distribution of funds remains an important topic. This report describes the formula and eligibility changes adopted by Congress since 1972, revealing the interplay and decisionmaking by Congress on factors to include in the formula. Two types of trends and institutional preferences can be discerned in these actions. First, there are differences over the use of need and population factors in the allocation formula itself. During the 1970s, the Senate strongly favored reliance on use of population factors in the allocation formula, while the House strongly advocated a needs-based approach. During the 1980s, the period when categorical eligibilities were restricted in order to emphasize water quality benefits, the Senate favored needs as the basis for grants distribution, while the House position generally was to retain formulas used in prior years, which incorporate both needs and population elements. When population has been used as a factor, differences have occurred over whether a current or future year population estimate is appropriate, but there is no clear trend on this point. Second, until recently, there have been gradual increases in restrictions on types of wastewater treatment projects eligible for federal assistance. Beginning with a limitation that denied use of federal funds for stormwater sewer projects in 1977, debate over categorical eligibility has had two elements. One has been fiscal: a desire to not fund types of projects with the highest costs and often the most unreliable cost estimates. The other focus has been environmental: a desire to use federal resources to assist projects which benefit water quality protection most directly. While some of these eligibility restrictions presented Congress with rather straightforward choices, others have been more complex. Some continue to be debated, such as whether certain types of projects should be fully eligible for federal aid or should be the responsibility of state and local governments. The 2014 CWA amendments enacted as part of WRRDA revised the list of project categories that are SRF-eligible to include some that have been eligible by practice, such as stormwater management and treatment, and to identify newly-eligible categories, such as decentralized wastewater treatment systems. The following table provides a generalized summary of the components of the allocation formula since 1972. Details discussed below should be consulted, because a summary table such as this cannot fully reflect factors such as "hold harmless" or "minimum share" provisions frequently included in the state-by-state distribution scheme to protect states with small allocations or to minimize potential disruptions when formula changes were adopted. The term "total needs" refers to funding needs identified by states for all categories of projects and water quality activities eligible for assistance. The term "partial needs" refers to a subset of eligible project categories, primarily construction or upgrades to comply with the act's minimum requirement that municipalities achieve secondary treatment of wastewater. Prior to enactment of the Federal Water Pollution Control Act Amendments in 1972 (FWPCA, P.L. 92-500), the federal government administered a comparatively small program of aid for constructing municipal wastewater treatment plants. Under the prior program, assistance was allocated to states on the basis of population. There was no statutory formula. Nor was there a systematic process for the federal government or states to estimate and report on funding needs for sewage treatment. Needs surveys had been developed by the Conference of State Sanitary Engineers, which reported generally (but not rigorously) on estimated construction costs of municipal waste treatment facilities planned by communities to meet water quality standards or other standards or enforcement requirements. They lacked both consistent definitions of objectives and consistent reporting requirements. Moreover, these surveys tended to be based on needs of larger municipalities, so needs in small or rural communities were underrepresented. The first funding needs survey undertaken by the federal government was published in 1968, in response to a general requirement in the 1966 Clean Water Restoration Act for an annual report on "the economics of clean water," but it was a considerably more modest effort than followed enactment of P.L. 92-500. These early documents reported state-by-state and national total needs over a given period of time but did not estimate or report needs for particular categories of waste treatment projects, such as secondary treatment. Annual surveys were published each year through 1974; Congress then changed the reporting requirement to biennial. In P.L. 92-500 Congress provided the first statutory formula, governing state-by-state allocations in fiscal years 1973 and 1974. It was entirely needs-based and contained no categorical limitations. Despite weaknesses of the prior surveys, they were the only tool available to guide Congress when the decision was made in the 1972 legislation to move away from a population-based distribution of grants. The 1972 survey estimated total needs, from 1972 through 1976, to be $18.1 billion. Estimated construction costs for the first three years of that period were reported to be $14.6 billion. The rationale for changing to a needs basis for grants allocation despite limitations of available needs information was explained in the House Public Works Committee's report on the 1972 legislation. This needs formula is a sound basis for allotting funds since our experience to date clearly demonstrates that there is no necessary correlation between the financial assistance needed for waste treatment works in a given State and its population. The Committee is fully aware that at the present time there is no satisfactory estimate of the total funds required by the States for construction of publicly owned treatment works... However [the 1972 Needs Survey] report does provide some measure of the relative needs of the various States and in the absence of any better measure has been incorporated in the bill for the determination of the State allotments for the fiscal years 1973 and 1974. The Senate favored retaining population as the basis for grants allocation, and the available public records--committee reports and Senate debates--give no indication whether an alternative approach, such as one based on needs, was considered. The 1972 FWPCA incorporated a statutory formula for distributing grants that was derived from the 1972 survey for the period 1972 through 1974. It covered reported needs in the 50 states and territories, with little categorical restriction. Some limitation was included on use of federal funds for new collector sewers (which collect and carry wastewater from an individual house or business to a major, or interceptor, sewer that conveys the wastewater to a treatment facility). In addition, eligibility for funds was limited to communities in existence when P.L. 92-500 was enacted and could only be provided if the treatment plant had sufficient existing or planned capacity to treat sewage collected by such sewers. Section 205(a) of the FWPCA cross-referenced a table in a House Public Works and Transportation Committee Print that identified each state's percentage share under the legislation. The percentages would apply to total grant amounts made available through annual congressional appropriations. The statute provided that this distribution formula would apply for two years; in Section 516 of the act, EPA was directed to prepare a new needs survey that would govern distribution in FY1975. In response to the 1972 statutory directive, EPA undertook a new method of preparing the needs survey, and the 1973 Needs Survey was the first effort to report and evaluate needs for categories of waste treatment projects, as well as state and national totals. This survey reported costs for the following categories: I--Secondary treatment required by the 1972 act II--Treatment more stringent than secondary required by water quality standards III--Rehabilitation of sewers to correct infiltration and inflow IV--New collector and interceptor sewers V--Correction of overflows from combined stormwater and sanitary sewers (CSOs) This original categorization was subsequently refined. Category III was subdivided to include category IIIA--correction of infiltration and inflow in existing sewers; and category IIIB--replacement or rehabilitation of structurally deteriorating sewers. Category IV was subdivided to include category IVA--new collector sewers; and category IVB--new interceptor sewers. Needs surveys have continued to be based on this same categorical arrangement since the mid-1970s. However, from an initial estimate of $63 billion in the 1973 survey, the survey figure for wastewater treatment and collection system projects went to a high of $342 billion in 1974, dropped to $96 billion in 1976, rose to $106 billion in 1978, $120 billion in 1980, declined to $80 billion in 1990, and was assessed at $67 billion in 2000, the 13 th and most recent survey. Since the 1992 survey, states also have assessed needs for projects to address nonpoint pollution from sources such as agriculture, silviculture, and urban runoff. In the 2000 survey, needs for these types of projects were an additional $14 billion. Over time, inconsistencies and variations in the surveys have been ascribed to several factors, including the lack of precision with which needs for some project categories could be assessed and the desire of state estimators to use the needs survey as a way of keeping their share of the federal allotment as high as possible. In December 1973, Congress enacted P.L. 93-243 , Waste Treatment Fund Allocations, providing the Section 205(a) allocation formula for FY1975. As enacted, the formula was based on EPA's November 1973 Needs Survey, with a formula that split the difference between total needs and partial needs. The formula was one-half of amounts reported in the 1973 Needs Survey for all categories (secondary treatment, more stringent than secondary, sewer rehabilitation to correct infiltration and inflow, new collector sewers, new interceptor sewers, and CSO correction, but not separate stormwater sewers), and one-half of amounts just for categories including secondary treatment, more stringent than secondary and new interceptor sewers. The formula also included a hold harmless provision, under which no state would receive less in construction grant funds than it was allotted under the previous formula. Use of the partial needs categories was based on EPA's recommendation to the Congress that the allocation formula should only include the costs of providing treatment works to achieve secondary treatment (the basic national treatment requirement mandated in the 1972 act), treatment more stringent than secondary as required by water quality standards, and eligible new interceptor sewers, force mains, and pumping stations (categories I, II, and IVB, respectively). These were the core categories representing projects to comply with the basic water quality objectives of the Clean Water Act. EPA's basis for this recommendation was the agency's assessment that the data for the other categories, as reported by the states, were limited and considerably less reliable than for these three categories. In the 1973 survey, EPA reported that total needs nationwide were $60.1 billion (1973 dollars), but that reported costs probably underestimated actual expenditures--by half--due to underreporting of CSO needs and failure of states to report all needs in categories I and II. EPA reported that estimates from only 15 states included cost surveys of all communities in the state; data from the remaining 35 states represented all urban areas plus a sample of communities of less than 10,000 persons located outside urban areas. The Senate Committee on Public Works found that EPA's recommendations would lead to inequities affecting a number of states. In its version of legislation to establish an allocation formula for 1975 ( S. 2812 ), it recommended distribution based 75% on partial needs and 25% on 1972 population (i.e., the ratio of a state's 1972 population compared to the population of all states). The formula recommended by the House, in its version of the legislation ( H.R. 11928 ), was the same as the version finally agreed to: one-half partial needs, and one-half total needs, based on the 1973 EPA Needs Survey. The House committee's actions were explained by the chairman of the Public Works and Transportation Committee. The Environmental Protection Agency proposed two tables for allocation of the grant funds to the States. One was based on all of the needs of the States ... The other table was based on only part of the needs ... The committee heard testimony from several States, some of which would receive more funds under one table and some of which would receive more under the other table. In addition, some States found that under the needs concept they would receive less than they had previously when funds were allocated on the basis of population. The primary reason for this appears to be that these States have not yet accurately identified their true needs for wastewater treatment facilities. The committee is very much committed to the allocation of funds on the basis of need. After much consideration, we determined that the most equitable solution would be to allocate the funds for the next 2 fiscal years on the basis of 50 percent of each of the two tables, with no State receiving less than its allocation of 1972. While some States may receive a little less under the committee's solution, all States will benefit greatly in the long run. Although the House-passed bill called for a two-year allocation formula, the enacted legislation applied only to FY1975. Nevertheless, the formula continued to apply through FY1976, because Congress did not enact legislation to modify it until 1977. Appropriations in FY1977 were provided under two appropriations acts, the Public Works Employment Appropriations Act of 1976 and the Fiscal Year 1977 supplemental appropriations act, each using a different allocation formula. The 1973 allocation legislation, P.L. 93-243 , required EPA to prepare a new, comprehensive needs survey no later than September 3, 1974, and directed that it include all of the categories included in the 1973 survey, plus costs to treat separate storm water flows. In response, the next wastewater needs survey (the 1974 survey) was transmitted to Congress in February 1975. Based on that survey, EPA recommended that future formulas focus on needs reported for categories I, II, and IVB. This recommendation came from the agency's conclusion that data and cost estimates for other categories submitted in prior surveys had been of poor and inconsistent quality and had resulted in an inequitable allocation formula, as expressed by EPA Administrator Russell Train. There is serious doubt, however, that we will be able to provide accurate estimates of the total national needs, or of needs for each State, which would form an equitable basis for allocation of construction grant funds. Even categories I, II, and IV(b) will be very difficult to refine for purposes of allocation because of the large variations in approach used by the States in estimating needs in these categories. I believe that the fundamental differences in reported cost estimates for the construction of publicly owned wastewater treatment facilities highlighted by the last two surveys confirms our concerns about basing the allocation of Federal funds on "needs," at least as they are currently reported. Congress adopted EPA's recommendation to limit the use of "total needs" in connection with the allotment formula that governed distribution of $700 million in authorized monies under the Public Works Employment Act of 1976, P.L. 94-369 , but in so doing, it reintroduced a population factor. This act, commonly referred to as the Talmadge-Nunn Act, authorized funds for a number of public works programs, including wastewater treatment construction, in order to counter unemployment conditions in certain regions of the country. Under the statutory language, the wastewater treatment monies authorized in P.L. 94-369 were to be allocated just to the 33 states and 4 territories that had received inequitable allocations as a result of the prior two needs surveys. The action in this legislation is significant, because it restored population as a factor in the construction grants allocation formula. The formula in P.L. 94-369 was used to govern the distribution of $480 million in FY1977 construction grants to the 33 states and 4 territories identified in that act. The formula provided under P.L. 94-369 was 50% partial needs, as reported in the 1974 needs survey, and 50% 1990 projected population. The second portion of funds provided in Fiscal Year 1977, totaling $1 billion, was governed by the formula that Congress enacted in the FY1977 supplemental appropriations act, P.L. 95-26 . That legislation directed that construction grants allocation be according to the 25-50-25 formula contained in the table on page 16 of S.Rept. 95-38, which was 25% total needs from the EPA 1974 needs survey, 50% partial needs from the 1974 survey, and 25% 1975 population. The needs factors used in this formula were the same as had been in use since FY1975 (derived from the 1974 needs survey), but the population basis was different--population in 1975, rather than projected 1990 population, as under the formula that applied in 1976 under Talmadge-Nunn. The next Clean Water Act amendments that addressed the allocation formula were in the 1977 amendments ( P.L. 95-217 ); these amendments provided the distribution formula for FY1978 through FY1981. The final version of the formula was based 25% on total needs (excluding costs of treating separate stormwater flows), 50% on partial needs (categories I, II, and IVB), and 25% on population. The resulting distribution, on a percentage basis, was summarized in tables included in a House Public Works and Transportation Committee print; the allocation provided in table 3 from that report is referenced in Section 205(a) of the Clean Water Act, as amended by P.L. 95-217 . (As discussed below, this same formula was subsequently extended to 1982.) Documents in the legislative history do not indicate clearly either which year's needs survey or which population year were reflected in the final formula. The formula provided in the House version of the 1977 legislation ( H.R. 3199 ) contained a ratio similar to the final version and was based on data from EPA's 1974 needs survey and 1990 estimated population (the factors also used under the Public Works Employment Act of 1976). The Senate version of the legislation, S. 1952 , contained a formula based on 1975 population and needs reported in the 1976 survey for categories I, II, III, IVB, and V. The committee formula utilized the higher of the two percentages each state would receive under the two formulas and then reduced the total (which added up to 117.34%) to 100%. In addition, no state would receive less than one-half of one percent of total funds. Although the 25-50-25 ratio in the final formula was the same as under the House bill, the state-by-state percentages were not identical, so it appears that, although conferees endorsed the basic House approach, they made some changes, as well. Neither the conference report nor House and Senate debates on the final legislation provides sufficient explanation to determine which population year (1990 or 1975) or needs survey (1974 or 1976) was used in the final allocation formula. Beyond the question of which categories should be included for purposes of the allocation formula, the 1977 amendments presented the first explicit restrictions on categories eligible for federal grant assistance. Based on provisions in the Senate bill (the House version had no similar provisions), the 1977 amendments made one categorical restriction. The legislation prohibited use of federal funds for projects to control pollutant discharges from separate storm sewer systems, category VI in the EPA needs survey. The concerns here were fiscal (the 1974 survey estimated category VI costs at $235 billion, or double all other costs in total) and environmental. The committee sought to assure that federal funds would be used for facilities most critical to reducing pollutant discharges, according to the report on the Senate bill, S. 1952 . The cost of controlling stormwater is substantial even after consideration of other options such as land use controls which may be more cost-effective in some situations. The Federal share for stormwater projects is beyond the reach of the limitations of the Federal budget. It is, furthermore, a cost for which water quality benefits have not been sufficiently evaluated, particularly since stormwater discharges occur on an episodic basis during which water use is minimal. Senate-proposed restrictions on new collector sewer systems and rehabilitation of existing collectors were not included in the final 1977 amendments. Like its proposal concerning stormwater sewers, the committee had contended that the costs of all such projects were excessive, while the water quality benefits were less significant than other core projects, such as constructing secondary treatment plants. P.L. 97-117 , passed in 1981, contained the formula governing distribution of construction grant funds from 1982 through 1985. It was subsequently extended through 1986. These amendments included a number of eligibility restrictions, as well. The House bill, H.R. 4503 , proposed to extend the existing formula through FY1982 only. The position of the House Public Works Committee was that it would address multi-year funding issues in a comprehensive review of the Clean Water Act in 1982. In S. 1716 , the Senate adopted a new formula based on 1980 population; backlog needs for categories I, II, and IVB, as reported in the 1980 needs survey; plus a minimum state share and "hold harmless" provisions to protect states in order to alleviate disruption of state programs, by minimizing potential loss of funds under a new formula. Backlog needs, used for the first time in connection with this legislation, were defined as facility requirements to meet the needs of the 1980 population--rather than 20 years' future growth, as had been customary in previous needs surveys and allotment formulas. The Senate formula would apply through FY1984. EPA was directed to conduct a new needs survey placing greater emphasis on public health and water quality needs; that survey would be the basis for allocation beginning in FY1985. As enacted, P.L. 97-117 incorporated the House formula for 1982. For 1983 through 1985, the legislation used the average of the House formula and the Senate formula for 1984--which was 1980 population, backlog partial needs (for categories I, II, IVB, and IIIA), and a hold harmless provision that no state would receive less than 80% of what it would have received under the 1977 amendments formula. These four categories were those which were to be fully eligible for federal grants, under categorical restrictions included in the legislation (see below). Because of delays in enacting a reauthorization bill in the mid-1980s, Congress extended this formula through 1986, as well. The 1981 legislation put in place several eligibility restrictions intended to restructure the grants program. The Senate committee explained the rationale in its report on the legislation. The members of this Committee, the Administration, and the majority of the witnesses who came before the Committee agree that the time has come to provide priority funding to those parts of the program which provide the greatest water quality benefit. The Committee bill reflects this principle. In the future, only treatment facilities and the necessary interceptor sewers associated with those plants will be eligible for Federal assistance. Two broad points were made by those who advocated restrictions: (1) current budgetary problems made it necessary to focus limited federal resources on the highest priority environmental problems; and (2) the Administration believed that the federal government's funding responsibilities had largely been met, and remaining water quality needs were local, not national, in scope. Based on these issues, the Reagan Administration proposed a number of program changes that Congress endorsed with some modifications: The Administration recommended eliminating eligibility for new collector sewers, sewer rehabilitation, infiltration and inflow correction, and combined sewer overflow projects. The 1981 amendments retained full eligibility for infiltration and inflow projects, on the basis that they can reduce the need for additional sewage treatment plant capacity. The amendments made the other categories (new collector sewers, sewer rehabilitation, and combined sewer overflows) generally ineligible for federal grants, but allowed governors to use up to 20% of their annual allotment for such projects. The general prohibition on use of federal funds for separate storm sewer projects, established in the 1977 legislation, was continued. The Administration recommended eliminating eligibility for reserve capacity to meet future population growth and recommended that the allotment formula be based only on backlog needs. The legislation provided that, after October 1, 1984, no grant would be made for reserve capacity in excess of that needed when an actual construction grant is awarded and in no event in excess of needs existing on October 1, 1990. The Administration recommended eliminating "hold harmless" and minimum allocation provisions of the formula which were not related to water quality benefits. Congress did not adopt these recommendations. Finally, although not part of the Administration's recommendations, the enacted legislation reduced the federal share for eligible projects from 75% to 55%, to extend limited federal funds to more projects. In the 1987 amendments, P.L. 100-4 , Congress adopted the allocation formula that has been in effect since then. Unlike the 1981 legislation, Congress did not make fundamental changes in eligibility--there were no further limitations on types of projects eligible for federal assistance. The prohibition on federal funding for separate storm sewers was continued. The bigger policy issues debated in this legislation concerned establishing state revolving funds as the future funding mechanism, thus replacing the previous construction grants program. Congress directed that the act's statutory allotment formula would govern the new SRF program (Title VI of the act) and also would continue to govern construction grants allotment during the transition from the old funding program to the new one in 1991. Nowhere in the legislative history of Congress's final action on the 1987 amendments is there a clear statement about the weighting or factors that went into the final allocation formula--it is even difficult to guess. The conference report on the final legislation merely states: "The conference substitute adopts a new formula for distributing construction grant funds and the state revolving loan fund capitalization grants among states for fiscal years 1987 through 1990. The allotment formula for FY1986 is the same as under current law." It is clearer, however, where the two houses began. During consideration of the legislation, the House favored retaining the formula adopted in 1981. The Senate proposed an entirely new formula. The Senate formula was based on partial needs (year 2000 needs--not backlog needs, as in the 1981 formula) reported in the 1984 needs survey for the 4 categories which are fully eligible for federal funds: I, II, IIIA (made eligible in 1981), and IVB. As reported by the committee, the formula was essentially based on needs for these categories. There was no explicit population factor--but an implicit population factor was incorporated in reverse, because 21 small states were allotted a slightly larger share in order to be able to maintain viable programs, according to the committee report. In addition, the formula in the Senate-reported bill included an 80% hold harmless provision for 11 large states that were expected to experience greater changes in eligibility because of the revised formula, compared with the average. The formula adopted by the Senate was different still: it provided that the full extent of formula changes would apply to the last three of the five years covered by the reauthorization and that a modified version would govern during the first two years. The two-year modified version gave the large states an 85% hold harmless by holding down the amount of increased share that the smaller states would receive--so that large states would lose less, and smaller states would gain less, at least in the first two years. Accordingly, the Senate formula was essentially needs-based, with an unquantifiable population factor apparently included, as well. It was merged--in ways that are not clear from available public documents--with the House formula, which had total needs, partial needs, and 1980 population factors. The revised formula is contained in CWA Section 205(c)(3) (33 U.S.C. SS 1285(c)(3)). Since 1987, Congress has on several occasions considered CWA reauthorization legislation that would have modified the allotment formula that was adopted in P.L. 100-4 . In each Congress since the 107 th , House and Senate committees approved legislation to reauthorize water infrastructure financing programs, including a revised allocation formula. The House has twice passed reauthorization bills (in 2007 and 2009), but none has received further action. Allotment formula issues were again under consideration in the 111 th Congress, but no legislation was enacted. H.R. 1262 , passed by the House in March 2009, and S. 1005 , approved by the Senate Environment and Public Works Committee in May 2009, would have revised the current allotment for clean water SRF monies, but in different ways. The House bill would have extended the current formula in full for two years. Under that legislation, beginning in the third year and thereafter, distribution would be determined under a hybrid approach: for appropriated funds up to $1.35 billion, the current formula would apply, and for appropriated funds in excess of that amount, allotment would be done in accordance with funding needs as reported in the most recent clean water needs survey conducted by EPA and states. The Senate bill in the 111 th Congress proposed a new state-by-state allotment for clean water SRF capitalization grants that was based on the 2004 needs survey (which was the survey available at the time of the committee's consideration). The revised formula in S. 1005 included certain adjustments, for example, guaranteeing small states a minimum 0.75% share (rather than 0.5% as under current law), and generally insuring that no state would "gain" more than 50% compared with its current percentage share or "lose" more than 25% compared with its current allotment. In 1996, Congress amended the Safe Drinking Water Act and established a drinking water state revolving loan fund program modeled after the clean water SRF. However, in that act ( P.L. 104-182 ), Congress took a different approach from that in the CWA and directed that drinking water SRF capitalization grants be allotted among the states by EPA based on the proportional share of each state's needs identified in the most recent national drinking water needs survey, not according to a statutory allotment formula. While the clean water and drinking water SRFs represent significant amounts of federal financial assistance, Congress has provided other assistance, as well, in the form of grants earmarked in EPA appropriations acts for specific communities, both small and large. For a number of years, congressional appropriators had dedicated a portion of annual water infrastructure assistance as earmarked special project grants which are not subject to any statutory or other allotment formula. For example, for FY2010 ( P.L. 111-88 ), Congress appropriated $2.1 billion for clean water SRF capitalization grants, $1.4 billion for drinking water SRF capitalization grants, and $187 million in earmarked grants for projects in 319 designated communities or areas. Since the first of these earmarks in EPA appropriations in FY1989, Congress provided $7.5 billion for special project grants. Congress imposed a moratorium on earmarking in FY2011, but could restore it in the future. In 2014, as part of CWA amendments enacted in the Water Resources Reform and Development Act of 2014 (WRRDA, P.L. 113-121 ), Congress directed EPA to prepare a report to Congress "to determine whether [the current allotment] formula adequately addresses the water quality needs of eligible States, territories, and Indian tribes." The EPA report, completed in May 2016, concludes that the current allotment formula does not adequately reflect reported water quality needs or current population for the majority of states. For example, EPA's analysis found that the current formula adequately reflects the water quality needs for only 17 states, compared with an allotment based on the most recent needs survey. Similarly, the current formula reflects the water quality needs for only 14 states, compared with an allotment calculated using 2010 population data. The report provides several possible options for updating the allocation formula, without recommendation, based on needs survey data, population data, and other elements, such as the extent of a state's reported water quality impairment. Some of the options described in the EPA report include "hold harmless" factors that could constrain potential percentage decreases or increases in funding to individual states. Because the CWA SRF program is the principal source of federal financial assistance for wastewater infrastructure projects, pressure has grown to expand the categories eligible under the program to include additional types needed by communities to meet a wider range of water quality objectives. Congress responded to these concerns in the CWA amendments that were included in WRRDA 2014. These amendments did not modify the existing state-by-state allotment formula or reauthorize SRF capitalization grant funds, but they revised the statutory list of SRF-eligible projects to expressly include some types of projects that have been SRF-eligible by practice (such as measures to manage, reduce, treat, or recapture stormwater; wastewater facility security projects; and reusing or recycling wastewater or stormwater), as well as a number of newly identified categories that now may be assisted by an SRF. These include-- decentralized wastewater treatment projects (e.g., individual onsite systems), measures to reduce demand for wastewater treatment works capacity through water conservation or reuse, or to reduce the energy consumption needs of wastewater treatment works, development and implementation of watershed projects, and assistance to small and medium wastewater treatment facilities to develop and obtain project financing and to assist such facilities in complying with the CWA (assistance recipients must be a nonprofit entity). Arguably, these less-traditional types of projects could benefit water quality protection and improvement, as do traditional infrastructure investments, and supporting them through the SRF would help ensure comparatively secure funding. But expanding the scope of eligibility also arguably dilutes the historic focus of the CWA SRF program, at a time when needs for core projects--wastewater treatment facilities and sewers--are estimated to be more than $195 billion. Since adoption of the allocation formula that has governed distribution of Clean Water Act assistance since 1987, EPA and the states have produced seven updated needs surveys (in 1988, 1992, 1996, 2000, 2004, 2008, and 2012). In addition, updated population information became available through three subsequent decennial Censuses (in 1990, 2000, and 2010). Although population changes have occurred during that time, and needs for water quality projects also have changed (total needs increased 17% between the 2004 and 2008 surveys, but decreased 20% between the 2008 and 2012 surveys), none of this more recent information is reflected in the currently applicable distribution formula. The recent needs surveys have included estimates of needs for traditional wastewater project categories, but they also have included estimates for newer categories, such as stormwater management--now identified separately from combined sewer overflow correction--recycled water distribution, and decentralized wastewater treatment systems (e.g., onsite and clustered community systems often found in rural areas). Crafting an allotment formula has been one of the most controversial issues debated during reauthorization of the Clean Water Act. The dollars involved are significant, and considerations of "winner" and "loser" states bear heavily on discussions of policy choices reflected in alternative formulations. This is likely to be the case again, when Congress reauthorizes the wastewater infrastructure funding portions of the act. In part because the current allocation formula is now more than 25 years old, the issue of how to allocate state-by-state distribution of federal funds remains an important topic of interest to policymakers and state and local officials.

Congress established a statutory formula governing distribution of financial aid for municipal wastewater treatment in the Clean Water Act (CWA) in 1972. Since then, Congress has modified the formula and incorporated other eligibility changes five times. Federal funds are provided to states through annual appropriations according to the statutory formula to assist local governments in constructing wastewater treatment projects in compliance with federal standards. The most recent formula change, enacted in 1987, continues to apply to distribution of federal grants to capitalize state revolving loan funds (SRFs) for similar activities. The current state-by-state allotment is a complex formulation consisting basically of two elements, state population and "need." The latter refers to states' estimates of capital costs for wastewater projects necessary for compliance with the act. Surveys of funding needs have been done since the 1960s and became an element of distributing CWA funds in 1972. The Environmental Protection Agency (EPA) in consultation with states has prepared 16 clean water needs surveys since then (the most recent was released in 2016) to provide information to policymakers on the nation's total funding needs, as well as needs for certain types of projects. This report describes the formula and eligibility changes adopted by Congress since 1972, revealing the interplay and decisionmaking by Congress on factors to include in the formula. Two types of trends and institutional preferences can be discerned in these actions. First, there are differences over the use of "need" and population factors in the allocation formula itself. Over time, the weighting and preference given to certain factors in the allocation formula have become increasingly complex and difficult to discern. Second, until recently, there was a gradual increase in restrictions on types of projects eligible for federal assistance. However, amendments adopted in 2014 expanded eligibilities, adding eligibility for such measures as water conservation, efficiency, or reuse in order to reduce demand for capacity of wastewater treatment facilities. Crafting an allotment formula has been one of the most controversial issues debated during past reauthorizations of the Clean Water Act. The dollars involved are significant, and considerations of "winner" and "loser" states bear heavily on discussions of policy choices reflected in alternative formulations. This is likely to be the case again, when Congress considers legislation to reauthorize the act. Because the current allocation formula is now more than 25 years old, while needs and population have changed, the issue of how to allocate state-by-state distribution of federal funds remains an important topic. In May 2016, EPA issued a report requested by Congress on the allotment of CWA water infrastructure funding. It concludes that, for the majority of states, the current allotment does not adequately reflect reported water quality needs or the most recent Census data on population. It provides several possible options to update the allotment in the future, but does not recommend or identify a preferred option.

Although the appointment of the chairman of the National Intelligence Council (NIC) does not require the advice and consent of the Senate, the planned designation of retired Ambassador Charles Freeman to the position in March 2009 focused attention on the NIC by Members of Congress and by many in the public. Most believe congressional criticism was undoubtedly a factor in Mr. Freeman's ultimate decision to withdraw his name from consideration. In May 2009, then-Director of National Intelligence Dennis C. Blair announced the appointment of Christopher A. Kojm as NIC chairman. Mr. Kojm had earlier served as deputy director of the National Commission on Terrorist Attacks Upon the United States (the 9/11 Commission), in the State Department's Bureau of Intelligence and Research, and as a professor of international affairs practice at George Washington University. The NIC is responsible for the U.S. intelligence community's most authoritative assessments of major issues affecting the national security. The NIC is a component of the U.S. intelligence community that is not well known even though it is less shrouded in secrecy than most other intelligence offices. Inherent to intelligence efforts is analysis of data collected. The first statutory responsibility of the DNI is to ensure that national intelligence is provided to the President, department heads, military commanders, and the Congress. Although this responsibility along with intelligence appropriations is sufficient to permit the DNI to establish analytical offices, the National Security Act also specifically establishes the NIC and defines its role at the center of the government's intelligence analysis efforts. By law, the NIC is to consist of "senior analysts within the intelligence community and substantive experts from the public and private sector, who shall be appointed by, report to, and serve at the pleasure" of the DNI. The senior analysts are known as National Intelligence Officers (NIOs). There is no statutory requirement that a chairman of the NIC be designated. The NIC is to produce "national intelligence estimates for the United States Government, including alternative views held by elements of the intelligence community." National intelligence estimates and other NIC products are defined as setting forth the judgment of the intelligence community as a whole on a matter covered by such product. Members of the NIC serve on a full-time basis as the senior intelligence advisers of the intelligence community to the rest of the federal government. They are part of the Office of the DNI (ODNI) and are not assigned to any other intelligence agency. By law the ODNI cannot be co-located with any other element of the intelligence community; currently the ODNI headquarters is located in a separate building in the Virginia suburbs of Washington, DC. In 2011 the NIC consisted of a chairman, vice chairman, counselor, chief of staff, director of a strategic futures groups, and a senior advisor on global health security, in addition to some 14 NIOs. Currently, NIO positions are responsible for the following geographic and functional areas: Africa Cyber issues East Asia Economic issues Europe Military issues Near East North Korea Russia and Eurasia Science and Technology South Asia Transnational Threats Weapons of Mass Destruction and Proliferation Western Hemisphere At present, the National Security Act, as amended, provides that the DNI appoints the members of the NIC and they serve at his pleasure, unlike the preponderance of career analysts in the various agencies. In recent years these appointments have been balanced among individuals who have served in the Foreign Service, the Defense Department, and the intelligence community, along with a number of persons from academic life or nongovernmental organizations. None of the NIC appointments require the advice and consent of the Senate. The responsibilities of the NIC are further set forth in intelligence community Directive Number 207, National Intelligence Council . Directive 207 requires that the NIOs, acknowledged experts in their areas of responsibility, provide intelligence assessments to the National Security Council, military decision-makers, and Congress. To accomplish this, NIOs may task agencies to provide analytical support. They may also work with officials in the ODNI to establish requirements for collection efforts by the various agencies (changing collection efforts can involve the major realignments of technical systems such as satellites). The NIC provides necessary preparatory and briefing materials for the DNI in his capacity as head of the intelligence community. There can be tension among these duties; involvement in preparing National Intelligence Estimates (NIEs) and other assessments requires wide-ranging substantive expertise, participating in managing the collection effort requires detailed understanding of sophisticated technical systems, and providing staff support to the DNI can be time-consuming. In the past 15 years there has been a tendency to include more NIOs who have served in non-governmental positions in think tanks or universities along with ambassadors and retired military leaders. Some argue that such backgrounds help ensure the relevance of analytical products but do not necessarily provide the detailed understanding of the limitations of collection capabilities. Others maintain that it is only essential that NIOs understand which intelligence collection disciplines are most useful in answering which analytical questions and that detailed knowledge of technical systems is not required. Another potential danger is that the NIOs might become so committed to supporting the DNI in meetings and testimony that they have insufficient time for more detailed analytical work. The NIC produces coordinated assessments of the intelligence community's views, including NIEs, the NIC's "flagship product," that "provides the authoritative written judgments of the [Intelligence community] on national security issues for the United States Government." NIEs are initiated by senior civilian or military policymakers, Congress (by request or mandated in legislation), or by the NIC itself. After terms of reference are approved, the NIC assigns analysts to produce a draft. The NIC evaluates the draft, which is subsequently forwarded to intelligence agencies. Representatives from the agencies then meet "to hone and coordinate line-by-line the full text of an NIE." NIEs are reviewed by the DNI and the heads of relevant intelligence community agencies. Once approved, NIEs are disseminated to the President and to senior executive branch officials and Congress. In general, the members of the NIC are not public spokesmen for the intelligence community. They may testify before congressional committees and give occasional public talks to think tanks or academic meetings, but they are not policymakers and are not charged with informing the public. Their work is essentially internal to the federal government. On occasion some NIEs or specially prepared summaries are released to the public and become part of policy debates. In December 2007, an unclassified summary of an NIE on Iran's nuclear programs was released inasmuch as it included judgments at variance with an earlier assessment. Older NIEs of historical interest are occasionally published by CIA's Center for the Study of Intelligence or are included in the State Department's Foreign Relations of the United States series. Long before establishment of the NIC, during World War II, the Office of Strategic Services (OSS) included a large number of eminent scholars who prepared reports based on all available intelligence. After the war, these functions and some of the scholars were eventually transferred to the Central Intelligence Agency (CIA). In 1950 an Office of National Estimates (ONE) was established in the CIA. The office included a Board of National Estimates (BNE) consisting of some 5-12 experts, chaired by former Harvard historian William L. Langer. The BNE's estimates were to reflect the views of the entire intelligence community, not just the CIA; the goal was to ensure that the President and other senior officials had the collective wisdom of all agencies based on all evidence to avoid the mistakes that were made prior to Pearl Harbor. The then-Director of Central Intelligence (DCI), Walter Bedell Smith, personally selected experts in the field in strategy, political science, economics, and other social sciences along with individuals with broad experience in intelligence. Among those selected was a Yale historian, Sherman Kent, who succeeded Langer in 1952 and remained as head of the BNE until 1967. Eventually the ONE had a professional staff of 25-30 specialists and a support staff. At first members of the board were expected to be generalists; later on, elements of specialization developed. They had access to CIA products but also to intelligence produced in other intelligence agencies. Although the members of the BNE worked directly for the DCI, the relationship of the Office of National Estimates with the CIA's analytical component, the Directorate of Intelligence (DI), varied over the years. In 1952 the ONE was subordinated to the DI; in 1966 it became directly under the supervision of the DCI. The BNE set the pattern for NIEs and other less formal inter-agency assessments. The analytical standards were high and conclusions focused on issues that analysts believed policymakers would confront. NIEs became integral parts of most national security policymaking efforts, and more than 1,500 NIEs were published over the 23 years of the BNE's existence. Inasmuch as the estimates (drafted by the BNE and later by the NIC) were considered the DCI's estimates, they did not necessarily reflect the views of CIA analysts or those of analysts in other agencies. BNE estimates such as those addressing the Soviet Union's strategic capabilities provided the foundation for U.S. defense planning and arms control negotiations during the length of the Cold War. NIEs during the Vietnam War tended to be more pessimistic in regard to South Vietnam's capabilities than were assessments from Defense Department analysts. A major embarrassment was the board's judgment in September 1962 that the Soviet Union would be unlikely to deploy offensive missiles to Cuba. The following month photographic evidence revealed that missile bases were in fact being installed, a revelation that led to the Cuban Missile Crisis. Over time there were concerns that the board had become too inward-directed and had lost contact with policymakers. In 1973 DCI William Colby abolished the board and established a number of positions designated National Intelligence Officers (NIOs). Colby later wrote: I had sensed an ivory-tower mentality in the Board [of National Estimates]; its composition had tended to shift to a high proportion of senior analysts who had spent most of their careers at [CIA] and who had developed a "mind-set" about a number of the issues in opposition to the views of the Pentagon and because of the way [President Richard] Nixon and [National Security Adviser Henry] Kissinger had excluded them from some of the White House's more sensitive international dealings. Furthermore: I was troubled over how badly the machinery was organized to serve me. If I wanted to know what was happening in China, for example, I would have to assemble individual experts in China's politics, its economics, its military, its personalities, as well as the clandestine operators who would tell me things they would tell no one else. Or I could commission a study that would, after weeks of debate, deliver a broad set of generalizations that might be accurate but would be neither timely nor sharp.... Thus, I created the positions of National Intelligence Officers, and I told the eleven men and one woman whom I chose for the jobs that they were to put themselves in my chair as DCI for their subject of specialization.... They were chosen from the intelligence community and private life as well as the CIA, and they served as the experts I needed in such subjects as China, Soviet affairs, Europe, Latin America, strategic weaponry, conventional forces, and economics, ranging throughout the intelligence community and out into the academic world to bring to me the best ideas and press the different disciplines to integrate their efforts. From 1973 until 1979, there was a position of Deputy to the DCI for the NIOs. In 1979, the NIOs were formally organized into a National Intelligence Council by the then-DCI Stansfield Turner. The NIC, along with the CIA's DI, were integrated in a newly created National Foreign Assessment Center (a name that endured only until the end of 1981). Unlike the members of the BNE, the NIOs had specific areas of geographic or functional responsibilities. The NIOs, like the members of the BNE, reported directly to the DCI, but administratively they had a complicated relationship with the DI; DCI William Casey appointed Robert Gates to head both the DI and NIC. Later he would recall, "some on the outside thought one person should not be the head of the Council and also head of CIA's analytical component. They were right." Subsequent observers would share the view that the NIOs need to be separated from the management of CIA's DI to permit a certain distance from institutionalized analytical viewpoints and to ensure that they have equal access to the conclusions of other intelligence agencies. Out of the recurring concern that the intelligence community had "grown too isolated from the consumer it was established to serve," the Intelligence Authorization Act for FY1993 ( P.L. 102-496 ) provided a statutory authorization for the NIC. The provision, which originated in the Senate Select Committee on Intelligence, was intended to elevate the institutional status of the NIC both within the government and in the private sector. The Senate Intelligence Committee anticipated that the NIC would include substantive experts from within and outside the government. The Senate-passed version of the legislation had included a provision that the NIC would have a designated chairman and two deputy chairmen, one of whom was to be from the private sector. This provision was not, however, adopted in the conference report as a result of objections from the George H. W. Bush Administration that it would restrict the flexibility of the DCI. However, the conferees emphasized that they shared the Senate determination to include outside experts in the NIC; "the conferees believe that effective use of individuals from outside of government in the NIC is absolutely essential to creating and maintaining the expertise, objectivity, and independence so critical to the production of national intelligence estimates." After the Soviet collapse, the NIC prepared estimates dealing with a multitude of post-Cold War issues and, especially during the Clinton Administration, there was emphasis on non-traditional issues such as the effects of environmental change on national security policy. Although the relevant NIOs coordinated a 1995 NIE predicting terrorist threats against the United States and in the United States, the NIC was criticized in December 2002 by the joint inquiry of the two congressional intelligence committees for not having prepared an NIE on the threat to the United States posed specifically by Al Qaeda. The NIE process was a source of widespread concern in the aftermath of the NIE on Iraqi weapons of mass destruction (WMD) prepared in September 2002 at the request of Members of Congress. The estimate that Baghdad was hiding large numbers of WMDs was not borne out by a field investigation undertaken after the collapse of Saddam Hussein's regime and called into question the basic competence of the intelligence community in general. A subsequent investigation by the Senate intelligence committee and by an independent presidential commission found that the NIE reflected a number of substantive problems in both collection and analytical efforts. In 2004 the 9/11 Commission, in reviewing the role of intelligence agencies prior to the September 2001 attacks on the Pentagon and the World Trade Center, concluded that there was insufficient coordination across the agencies and a weak capacity to set priorities and move resources. Accordingly, the Intelligence Reform and Terrorism Prevention Act of 2004 ( P.L. 108-458 ), enacted in the wake of the 9/11 Commission's recommendations and in view of widespread congressional concern about the quality of analytical products, created the position of Director of National Intelligence, and the NIC and the NIOs were transferred to the Office of the DNI (ODNI). The chairman of the NIC has been "double-hatted" as a Deputy DNI for Analysis (one of four deputies that the DNI is authorized to establish). As noted above, this legislation placed the NIC directly under the DNI and reiterated its statutory responsibilities. Most observers believe that congressional committees benefit from the testimony of NIC members either in open or closed sessions. When Congress requests NIEs or other intelligence assessments, the NIC is responsible for ensuring they are prepared. Congressional intelligence committees conduct oversight of all intelligence activities and have, on occasion, focused on analytical efforts, including NIEs. Publically available documents do not, however, include oversight hearings of the NIC and its work. There are a number of ways that oversight of the NIC might be changed. Congress might choose to pass legislation to establish the position of NIC chairman and require that appointments to this position be made by the President subject to the advice and consent of the Senate. NIOs are not policymakers; they share the intelligence community's mandate to produce intelligence "independent of political considerations." On the other hand, NIOs are not simply technical experts inasmuch as they are required to be substantive experts in fields that are often very controversial and directly related to policymaking. Requiring confirmation of NIOs would permit the Senate to assure itself that nominees were fully qualified and prepared to uphold the statutory obligations of providing intelligence that is "timely, objective, independent of political considerations, and based upon all sources available to the intelligence community and other appropriate entities." The Senate could satisfy itself that the NIC was not being affected by too many NIOs with similar perspectives on national security issues. The confirmation process would provide an oversight opportunity, including the chance to obtain a promise by the nominee to testify in the future. Some might argue that the confirmation process tends to delay appointments and that Senate confirmation might also add a partisan component to filling a position specifically designed to be nonpartisan. Some might also argue that Senate confirmation is inappropriate since the work of the NIC does not involve policymaking or extensive managerial responsibilities, unlike the work of many officials so appointed. Another consideration is that adding a requirement for Senate confirmation for all NIOs would absorb additional administrative resources both in the executive and legislative branches. Another approach would include greater congressional oversight of the NIC's activities and its products. Much of such oversight would necessarily have to be in closed sessions, but in the past there have been a number of public reviews of the intelligence community's analytical efforts that have resulted in a number of modifications to NIC practices. On one occasion the NIC acknowledged that it had taken several steps in accordance with specific congressional recommendations, viz .: Created new procedures to integrate formal reviews of source reporting and technical judgments. The Director CIA, as the National HUMINT [human intelligence] Manager, as well as the Directors of NSA [National Security Agency], NGA [National Geospatial-Intelligence Agency], and DIA [Defense Intelligence Agency], and the Assistant Secretary/INR [Assistant Secretary of State for Intelligence and Research] are now required to submit formal assessments that highlight the strengths, weaknesses, and overall credibility of their sources used in developing the critical judgments of the NIE. Applied more rigorous standards. A text box is incorporated into all NIEs that explains what is meant by such terms as "we judge" and that clarifies the difference between judgments of likelihood and confidence levels. The NIC sought to make a concerted effort to not only highlight differences among agencies but to explain the reasons for such differences and to display them prominently in the Key Judgments. Questions have been raised about the role of NIOs, and the NIC generally, within the government, some arguing that the NIC "has become the administrative support staff for the [DNI] as he prepares for high-level meetings, assembling briefing books for him." A number of observers point to the time consumed in preparing NIEs and other products that may not provide the best source of intelligence support for policymakers. Others believe that the NIOs and the NIC chairman have not commanded significant influence among executive branch agencies or in Congress. On the other hand, it is also acknowledged that the positions are sufficiently unstructured as to allow well qualified appointees to recast the position to ensure they have a thorough knowledge of the intelligence community and not become entangled in any bureaucratic procedures. Key factors remain the capabilities of the appointees and the interest and support of the DNI--factors over which at present Congress has little influence. The ultimate goal of the nation's intelligence effort is to assist policymakers in understanding conditions affecting our national security. This is an achievable goal. It is also to be hoped that analysts can provide warning of imminent threats, but this is not always achievable given the multitude of players and the variety of threats. Nevertheless, the members of the NIC serve as "the senior intelligence advisors of the intelligence community for purposes of representing the views of the intelligence community." As such they have access to the full extent of information obtained by all U.S. intelligence agencies and they have access to all intelligence analysts in the government. They will in addition hopefully have understanding of ways that a particular issue fits into the entire international environment. Although any able analyst who spends years on a narrow issue may have unique insights, the NIOs should be able to provide the sense of context and a degree of perspective that comes from the service on the NIC. Most observers would probably agree that the role and missions of the NIC and of the national estimative process have not yet been fully developed. The NIC supports the DNI and reflects the views of the intelligence community in interagency discussions. They keep abreast of the work of intelligence agencies in their subject areas. They must avoid the classic temptations of either preparing academic treatises unrelated to policymaker concerns or becoming so close to the policy dialogue that they are unable to provide perspective or to offer evidence that might undermine the chosen policies of a given Administration. Few NIOs or chairs of the NIC in recent years have fully met the outlines of the position as envisioned by earlier intelligence leaders or by the drafters of statutory language regarding the NIC. As issues become more challenging and interrelated, the role of the NIC may grow. In addition, Congress may perceive a need for increased scrutiny of NIC products and for more extensive legislative branch oversight of the intelligence community's analytical efforts. Arguably Congress can have a broadened role in supporting the NIC. Congressional oversight can test analysts' conclusions from the multiple perspectives usually found within congressional committees. The back-and-forth that may result from oversight hearings may be uncomfortable for analysts and NIOs, but, given the inherent uncertainties in most intelligence analysis and the importance of the issues at stake, some observers suggest that rigorous exchanges can serve the national interest and maintain that their absence in the past led to policy errors or unfairly exposed the intelligence community to ex post facto criticism. All should recognize, however, that all intelligence is an intellectual activity that inevitably carries with it some degree of uncertainty. Appendix A. 50 U.S.C. 403-3b (extract) (a) National Intelligence Council There is a National Intelligence Council. (b) Composition (1) The National Intelligence Council shall be composed of senior analysts within the intelligence community and substantive experts from the public and private sector, who shall be appointed by, report to, and serve at the pleasure of, the Director of National Intelligence. (2) The Director shall prescribe appropriate security requirements for personnel appointed from the private sector as a condition of service on the Council, or as contractors of the Council or employees of such contractors, to ensure the protection of intelligence sources and methods while avoiding, wherever possible, unduly intrusive requirements which the Director considers to be unnecessary for this purpose. (c) Duties and responsibilities (1) The National Intelligence Council shall - (A) produce national intelligence estimates for the United States Government, including alternative views held by elements of the intelligence community and other information as specified in paragraph (2); (B) evaluate community-wide collection and production of intelligence by the intelligence community and the requirements and resources of such collection and production; and (C) otherwise assist the Director of National Intelligence in carrying out the responsibilities of the Director under section 403-1 of this title. (2) The Director of National Intelligence shall ensure that the Council satisfies the needs of policymakers and other consumers of intelligence. (d) Service as senior intelligence advisers Within their respective areas of expertise and under the direction of the Director of National Intelligence, the members of the National Intelligence Council shall constitute the senior intelligence advisers of the intelligence community for purposes of representing the views of the intelligence community within the United States Government. (e) Authority to contract Subject to the direction and control of the Director of National Intelligence, the National Intelligence Council may carry out its responsibilities under this section by contract, including contracts for substantive experts necessary to assist the Council with particular assessments under this section. (f) Staff The Director of National Intelligence shall make available to the National Intelligence Council such staff as may be necessary to permit the Council to carry out its responsibilities under this section. (g) Availability of Council and staff (1) The Director of National Intelligence shall take appropriate measures to ensure that the National Intelligence Council and its staff satisfy the needs of policymaking officials and other consumers of intelligence. (2) The Council shall be readily accessible to policymaking officials and other appropriate individuals not otherwise associated with the intelligence community. (h) Support The heads of the elements of the intelligence community shall, as appropriate, furnish such support to the National Intelligence Council, including the preparation of intelligence analyses, as may be required by the Director of National Intelligence. (i) National Intelligence Council product intelligence For purposes of this section, the term "National Intelligence Council product" includes a National Intelligence Estimate and any other intelligence community assessment that sets forth the judgment of the intelligence community as a whole on a matter covered by such product. Appendix B. Heads of the Board of National Estimates and the National Intelligence Council Chairmen of the Board of National Estimates William Langer 1950-1952 Sherman Kent 1952-1967 Abbot Smith 1968-1971 John Huizenga 1971-1973 Deputies to the DCI for National Intelligence Officers George Carver 1973-1976 Richard Lehman 1976-1977 Robert Bowie 1977-1979 Chairmen of the National Intelligence Council Richard Lehman 1979-1981 Henry Rowen 1981-1983 Robert Gates 1983-1986 Frank Horton III, 1986-1987 Fritz Ermarth, 1988-1993 Joseph Nye 1993-1994 Christine Williams 1994-1995 Richard Cooper 1995-1997 John Gannon 1997-2001 John Helgerson 2001-2002 Robert Hutchings 2002-2005 C. Thomas Fingar 2005-2008 Peter Lavoy 2008-2009 Christopher Kojm 2009- (Source: National Intelligence Council )

The National Intelligence Council (NIC), composed of some 18 senior analysts and national security policy experts, provides the U.S. intelligence community's best judgments on crucial international issues. NIC members are appointed by the Director of National Intelligence and routinely support his office and the National Security Council. Congress occasionally requests that the NIC prepare specific estimates and other analytical products that may be used during consideration of legislation. It is the purpose of this report to describe the statutory provisions that authorize the NIC, provide a brief history of its work, and review its role within the federal government. The report will focus on congressional interaction with the NIC and describe various options for modifying congressional oversight.

On August 31, 2010, President Obama announced that the U.S. combat mission in Iraq had ended. More than 100,000 troops have been withdrawn from Iraq, and a transitional force of U.S. troops has remained in Iraq with a different mission: "advising and assisting Iraq's Security Forces, supporting Iraqi troops in targeted counterterrorism missions, and protecting our civilians." This mission is called Operation New Dawn (OND). Table 1 provides statistics on fatalities and wounds in OND. All troops are slated for withdrawal from Iraq by the end of 2011. Table 2 provides statistics on fatalities and wounds during Operation Iraqi Freedom, which began on March 19, 2003, and ended August 31, 2010. Statistics may be revised as circumstances surrounding a servicemember's death or injury are investigated and as all records are processed through the U.S. military's casualty system. More frequent updates are available at DOD's website at http://www.defense.gov/news/casualty.pdf . A detailed casualty summary that includes data on deaths by cause, as well as statistics on soldiers wounded in action, is available at DOD's website at http://siadapp.dmdc.osd.mil/personnel/CASUALTY/castop.htm . According to the United Nations Assistance Mission for Iraq's (UNAMI's) tally, 2,953 Iraqi civilians were killed and 10,434 were injured during 2010. In comparison, according to the same source, 3,056 civilians were killed and 10,770 civilians wounded in 2009. UNAMI also reports figures provided to UNAMI from the Iraq Ministry of Human Rights. According to these figures, 3,254 Iraqi civilians died and 13,788 were wounded in 2010. A separate report from the Iraq Ministry of Human Rights, published in October of 2009, gave figures of 85,694 civilian deaths from 2004 to 2008. The 2009 report specified that it included only those deaths due to terrorist attacks, defined as "direct bombings, assassinations, kidnappings, and forced displacement of the population." In other words, the Iraq Ministry of Human Rights did not include in its 2009 total any civilian deaths that may have been due to coalition occupation or fighting between militias within Iraq. It is not clear whether this distinction was made with the 2010 data reported by UNAMI. Added together, the Iraq Ministry of Human Rights would seem to have a tally of 88,948 Iraqi civilian deaths from 2004 through 2010. Along with the Iraq Ministry of Human Rights, other Iraqi ministries also have kept data on civilian deaths. The Iraq Health Ministry releases data on civilian deaths and the Iraq Ministries of the Interior and Defense release data on police and security forces deaths. Each of these ministries releases their data to the press on a monthly basis. According to their totals, 9,466 civilians and 2,238 Iraqi police and security forces have died since January 2008. Figure 1 charts the deaths of civilians and police and security forces as reported by the Iraq Ministry of Health. The Iraq Body Count (IBC) website bases its casualty estimates on media reports of casualties, some of which may involve security forces as well as civilians. Using media reports as a base for casualty estimates can entail errors: some deaths may not be reported in the media, whereas other deaths may be reported more than once. The IBC documents each of the civilian casualties it records with a media source and provides a minimum and a maximum estimate. As of November 21, 2011, the IBC estimated that between 103,640 and 113,230 civilians had died as a result of military action. In a separate analysis of its data, the IBC also estimated that, between January 2006 and November 2008, 4,884 Iraqi police had been killed. A separate analysis used IBC data to look at Iraqi civilian deaths caused by perpetrators of armed violence during the first five years of the Iraq War. The researchers found that coalition forces caused 12% of civilian deaths, anti-coalition forces caused 11%, and unknown perpetrators caused 74%. In addition, they applied a "Dirty War Index" (DWI) and found that the most indiscriminate effects on women and children were from unknown perpetrators firing mortars, non-suicide vehicle bombs, and coalition air attacks. They concluded that "coalition forces had a higher DWI than anti-coalition forces for all weapons combined, with no decrease over the study period." The Iraq Coalition Casualty Count (ICCC) is another nonprofit group that, like the IBC, tracks Iraqi civilian and Iraqi security forces deaths using media reports of deaths. ICCC is also prone to the kind of errors likely to occur when using media reports for data: some deaths may not be reported, whereas other deaths may be reported more than once. The ICCC estimates that there were 50,152 civilian deaths from March 2005 through July 2011, and 8,825 security forces were killed from January 2005 to July 2011. Earlier studies include "the Lancet study." In 2006, researchers from Johns Hopkins University and Baghdad's Al-Mustansiriya University published their most recent cluster study on Iraqi civilian casualties, commonly referred to in the press as "the Lancet study" because it was published in the British medical journal of that name. The study surveyed 47 clusters and reported an estimate of between 426,369 and 793,663 Iraqi civilian deaths from violent causes since the beginning of Operation Iraqi Freedom to July 2006. In a more recent cluster study, a team of investigators from the Federal Ministry of Health in Baghdad, the Kurdistan Ministry of Planning, the Kurdistan Ministry of Health, the Central Organization for Statistics and Information Technology in Baghdad, and the World Health Organization formed the Iraq Family Health Survey (IFHS) Study Group to research violence-related mortality in Iraq. In their nationally representative cluster study, interviewers visited 89.4% of 1,086 household clusters; the household response rate was 96.2%. They concluded that there had been an estimated 151,000 violence-related deaths from March 2003 through June 2006 and that violence was the main cause of death for men between the ages of 15 and 59 during the first three years after the 2003 invasion. This study seems to be widely cited for violence-related mortality rates in Iraq. Neither the Lancet study nor the IFHS study distinguish among different victims of violence, such as civilians versus police or security force members. The studies do not reflect trends that occurred during the period of the most intense civil violence from early 2006 through the end of 2008. In 2007, a British firm, Opinion Research Business (ORB), conducted a survey in Iraq in which it asked 2,411 Iraqis, "How many members of your household, if any, have died as a result of the conflict in Iraq since 2003 (i.e., as a result of violence rather than a natural death such as old age)? Please note that I mean those who were actually living under your roof?" Extrapolating from its results, OBR estimated "that over 1,000,000 Iraqi citizens have died as a result of the conflict which started in 2003." Finally, the Brookings Institution has used numbers from the following sources to develop its own composite estimate for Iraqi civilians, police, and security forces who have died by violence: the U.N. Human Rights Report , the Iraq Body Count, the U.S. Central Command's General David Petraeus's congressional testimony given on September 10-11, 2007, Iraqi government sources, and other sources. By combining all of these sources by date, the Brookings Institution estimates that between May 2003 and July 2011, 115,515 Iraqi civilians died and between June 2003 and July 2011, 10,125 Iraqi police and security forces died. Table 4 provides Iraqi civilian, security forces, and police officers casualty estimates from nongovernmental sources. These estimates are based on varying time periods and have been created using differing methodologies, and therefore readers should exercise caution when using and comparing these statistics.

This report presents U.S. military casualties in Operation Iraqi Freedom (OIF) and Operation New Dawn (OND) as well as governmental and nongovernmental estimates of Iraqi civilian, police, and security forces casualties. For several years, there were few estimates from any national or international government source regarding Iraqi civilian, police, and security forces casualties. Now, however, United Nations Assistance Mission for Iraq (UNAMI) is reporting civilian casualty estimates. In addition, several Iraqi ministries have released monthly or total casualty statistics. Nongovernmental sources also have released various estimates of Iraqi civilian, police, and security forces casualties. This report includes estimates from Iraq Body Count (IBC), the Iraq Coalition Casualty Count (ICCC), Iraq Family Health Survey (IFHS), the most recent study published in the Lancet, the Brookings Institution, and the British survey firm, Opinion Research Business (ORB). Because the estimates of Iraqi casualties contained in this report are based on varying time periods and have been created using differing methodologies, readers should exercise caution when using them and should look to them as guideposts rather than as statements of fact. This report will be updated as needed.

The Establishment Clause of the First Amendment provides that "Congress shall make no law respecting an establishment of religion...." The U.S. Supreme Court has construed the Establishment Clause, in general, to mean that government is prohibited from sponsoring or financing religious instruction or indoctrination. But the Court has drawn a constitutional distinction between aid that flows directly to sectarian schools and aid that benefits such schools indirectly as the result of voucher or tax benefit programs. With respect to direct aid, the Court has typically applied the tripartite test it first articulated in Lemon v. Kurtzman . The Lemon test requires that an aid program (1) serve a secular legislative purpose; (2) have a primary effect that neither advances nor inhibits religion; and (3) not foster an excessive entanglement with religion. Because education is an important state goal, the secular purpose aspect of this test has rarely been a problem for direct aid programs. But prior to the Court's latest decisions, both the primary effect and entanglement prongs were substantial barriers. To avoid a primary effect of advancing religion, the Court required direct aid programs to be limited to secular use and struck them down if they were not so limited. But even if the aid was so limited, the Court often found the primary effect prong violated anyway because it presumed that in pervasively sectarian institutions it was impossible for public aid to be limited to secular use. Alternatively, it often held that direct aid programs benefiting pervasively sectarian institutions were unconstitutional because government had to so closely monitor the institutions' use of the aid to be sure the limitation to secular use was honored that it became excessively entangled with the institutions. These tests were a particular problem for direct aid to sectarian elementary and secondary schools, because the Court presumed that such schools were pervasively sectarian. It presumed to the contrary with respect to religious colleges. The Court's decisions in Agostini v. Felton and Mitchell v. Helms , however, have recast these tests in a manner that has lowered the constitutional barriers to direct aid to sectarian schools. The Court has abandoned the presumption that sectarian elementary and secondary schools are so pervasively sectarian that direct aid either results in the advancement of religion or fosters excessive entanglement. It has also abandoned the assumption that government must engage in an intrusive monitoring of such institutions' use of direct aid. The Court still requires that direct aid serve a secular purpose and not lead to excessive entanglement. But it has recast the primary effect test to require that the aid be secular in nature, that its distribution be based on religiously neutral criteria, and that it not be used for religious indoctrination. The Court's past jurisprudence imposed fewer restraints on indirect aid to sectarian schools such as tax benefits or vouchers. The Court still required such aid programs to serve a secular purpose; but it did not apply the secular use and entanglement tests applicable to direct aid. The key constitutional question was whether the initial beneficiaries of the aid (i.e., parents or schoolchildren) had a genuinely independent choice about whether to use the aid for educational services from secular or religious schools. If the universe of choices available was almost entirely religious, the Court held the program unconstitutional because the government, in effect, dictated by the design of the program that a religious option be chosen. But if religious options did not predominate, the Court held the program constitutional even if parents chose to receive services from pervasively sectarian schools. Moreover, in its decision in Zelman v. Simmons-Harris , the Court legitimated an even broader range of indirect aid programs by holding that the evaluation of the universe of choice available to parents is not confined to the private schools at which the voucher aid can be used but includes as well all of the public school options open to parents. In Everson v. Board of Education , the Court held it to be constitutionally permissible for a local government to subsidize bus transportation between home and school for parochial schoolchildren as well as public schoolchildren. The Court said the subsidy was essentially a general welfare program that helped children get from home to school and back safely. In Wolman v. Walter , on the other hand, the Court held the Establishment Clause to be violated by the public subsidy of field trip transportation for parochial schoolchildren on the grounds field trips are an integral part of the school's curriculum and wholly controlled by the school. In several decisions, the Court has upheld as constitutional the loan of secular textbooks to children in sectarian elementary and secondary schools, and in Wolman v. Walter , it upheld the inclusion in such a textbook loan program of related manuals and reusable workbooks. The Court has reasoned that the textbooks are by their nature limited to secular use and that the loan programs are general welfare programs that only incidentally aid sectarian schools. In contrast, the Court in Meek v. Pittenger and Wolman v. Walter held the provision of instructional materials other than textbooks, such as periodicals, photographs, maps, charts, films, sound recordings, projection and recording equipment, and lab equipment, to sectarian schools or sectarian school children to be unconstitutional because such aid provides substantial aid to the sectarian enterprise as a whole and inevitably has a primary effect of advancing religion. But in Mitchell v. Helms , the Court overturned those aspects of Meek and Wolman and held it to be constitutional for government to include sectarian schools in a program providing instructional materials (including computer hardware and software) on the grounds: (1) the aid was secular in nature; (2) was distributed according to religiously neutral criteria; and (3) could be limited to secular use within the sectarian schools without any intrusive government monitoring. In Lemon v. Kurtzman , the Court held it to be unconstitutional for a state to subsidize parochial school teachers of such secular subjects as math, foreign languages, and the physical sciences, either by way of a direct subsidy of such teachers' salaries or by means of a "purchase of secular services" program. The Court reasoned that the state would have to engage in intrusive monitoring to ensure that the subsidized teachers did not inculcate religion; and it held such monitoring to excessively entangle government with the schools. For a similar reason in Meek v. Pittenger , the Court struck down a program of "auxiliary services" to children in nonpublic schools which included enrichment and remedial educational services, counseling and psychological services, and speech and hearing therapy by public personnel. And in Aguilar v. Felton , it held unconstitutional the provision of remedial and enrichment services to eligible children in sectarian schools by public school teachers under the Title I program if they were provided on the premises of the sectarian schools. Finally, in City of Grand Rapids v. Ball , the Court also struck down a similar state program of remedial and enrichment services as well as a program in which the school district hired parochial school teachers to provide after-school extracurricular programs to their students on the premises of their sectarian schools. But in Agostini v. Felton , the Court overturned the Aguilar decision and the pertinent parts of Meek and Ball and upheld as constitutional the provision of remedial and enrichment educational services to sectarian schoolchildren by public teachers on the premises of sectarian schools. In addition, the Court in Zobrest v. Catalina Foothills School District upheld as constitutional the provision at public expense under the Individuals with Disabilities Education Act (IDEA) of a sign-language interpreter for a disabled child attending a sectarian secondary school. In both cases, the Court reasoned that the programs were general welfare programs available to students without regard to whether they attended public or private (sectarian) schools; and in Zobrest , it reasoned as well that the parents controlled the decision about whether the assistance took place in a sectarian school or a public school. In Levitt v. Committee for Public Education , the Court struck down a program reimbursing sectarian schools for the costs of administering and compiling the results of teacher-prepared tests in subjects required to be taught by state law because the teachers controlled the tests and might include religious content in them. In contrast, in Wolman v. Walter , the Court upheld a program in which a state provided standardized tests in secular subjects and related scoring services to nonpublic schoolchildren, including those in religious schools. Similarly, in Committee for Public Education v. Regan , the Court upheld a program that reimbursed sectarian schools for the costs of administering such state-prepared tests as the regents exams, comprehensive achievement exams, and college qualifications tests. In both cases, the Court reasoned that such tests were limited by their nature to secular use. In Regan , the Court also upheld as constitutional a program that reimbursed sectarian and other private schools for the costs of complying with state-mandated record-keeping and reporting requirements about student enrollment and attendance, faculty qualifications, the content of the curriculum, and physical facilities. The Court reasoned that the requirements were imposed by the state and did not involve the teaching process. In Committee for Public Education v. Nyquist , the Court struck down as unconstitutional a state program subsidizing some of the costs incurred by sectarian schools for the maintenance and repair of their facilities, including costs incurred for heating, lighting, renovation, and cleaning, on the grounds the subsidy inevitably aided the schools' religious functions. In Committee for Public Education v. Nyquist and Sloan v. Lemon , the Court held unconstitutional programs which provided tuition grants and tax benefits to the parents of children attending private schools, most of which were religious. In both instances, the Court found that the programs benefited only those with children in private schools, that most of those schools were sectarian, and that the programs had a primary purpose and effect of subsidizing such schools. In three other decisions, however, the Court upheld voucher and tax benefit programs where the benefits were available to children attending public as well as private schools or their parents. Mueller v. Allen involved a state program giving a tax deduction to the parents of all elementary and secondary schoolchildren for a variety of educational expenses, including tuition. Witters v. Washington Depa rtment of Services for the Blind involved a grant to a blind person who wanted to attend a religious college to prepare for a religious vocation under a state vocational rehabilitation program which provided educational assistance for a wide variety of vocations. In Zelman v. Simmons-Harris , the Court upheld a voucher program that assisted parents in failing public schools in Cleveland to send their children to private schools, most of which were sectarian. In each instance, the Court's rationale in upholding the programs was that the benefits were available on a religiously neutral basis and that sectarian schools benefited only indirectly as the result of the independent choices of students or their parents. In Zelman , the Court further held that the universe of choice open to parents was not limited to the private schools where the vouchers could be used, but included the full range of public school options open to them as well. The Court has in dicta repeatedly affirmed the constitutionality of the public subsidy of physician, nursing, dental, and optometric services to children in sectarian schools; and in Wolman v. Walter , it specifically upheld the provision of diagnostic speech, hearing, and psychological services by public school personnel on sectarian school premises. In addition, the Court has repeatedly in dicta affirmed the constitutionality of the public subsidy of school lunches for eligible children in sectarian schools. In dicta in Everson v. Board of Education , the Court affirmed as constitutional the provision of such general public services as police and fire protection, connections for sewage disposal, highways, and sidewalks to sectarian schools. According to the Court, the Establishment Clause does not require that religious schools be cut off from public services "so separate and so indisputably marked off from the religious function...." In Roemer v. Maryland Board of Public Works , the Court upheld a state program of noncategorical grants to all private colleges in the state, including ones that were church-affiliated, because the program included a statutory restriction barring the use of the funds for sectarian purposes. The Court stressed that the church-related colleges that benefited were not "pervasively sectarian" and that the aid was statutorily restricted to secular use. In Tilton v. Richardson , the Court upheld as constitutional a federal program that provided grants to colleges, including church-affiliated colleges, for the construction of needed facilities, so long as the facilities were not used for religious worship or sectarian instruction. The statute provided that the federal interest in any facility constructed with federal funds would expire after 20 years, but the Court held that the nonsectarian use requirement would have to apply so long as the buildings had any viable use. Subsequently, in Hunt v. McNair , the Court upheld a program in which a state issued revenue bonds to finance the construction of facilities at institutions of higher education, including those with a religious affiliation. The program barred the use of the funds for any facility used for sectarian instruction or religious worship. In Rosenberger v. The Rector and Board of Visitors of the University of Virginia , the Court held that it would be constitutional for a state university to subsidize the printing costs of an avowedly religious student publication. The university made the subsidy available to non-religious student publications as a way of fostering student expression and discussion, and the Court held that it would constitute viewpoint discrimination in violation of the free speech clause of the First Amendment to deny the subsidy to a student publication offering a religious perspective. In two summary affirmances, the Court has upheld the constitutionality of programs providing grants to students attending institutions of higher education, including religiously affiliated colleges. Both Smith v. Board of Governors of the University of North Carolina and Americans United for the Separation of Church and State v. Blanton involved grants given on the basis of need for students to use in attending either public or private colleges, including religiously affiliated ones. In affirming the decisions, the Supreme Court issued no opinion in either case, but the lower courts reasoned that the religious colleges benefited from the programs only if the students independently decided to attend. In Locke v. Davey , the Court considered the constitutionality of a state scholarship program that included a restriction on recipients that prohibited the use of scholarship funds to pursue devotional theological degrees. The Court noted that, because the recipient would make an independent choice regarding how to spend the funds, the federal Establishment Clause would not be violated by such a program.

A recurring issue in constitutional law concerns the extent to which the Establishment Clause of the First Amendment imposes constraints on the provision of public aid to private sectarian schools. The U.S. Supreme Court's past jurisprudence construed the clause to impose severe restrictions on aid given directly to sectarian elementary and secondary schools but to be less restrictive when given to colleges or indirectly in the form of tax benefits or vouchers. The Court's later decisions loosened the constitutional limitations on both direct and indirect aid. This report gives a brief overview of the evolution of the Court's interpretation of the Establishment Clause in this area and analyzes the categories of aid that have been addressed by the Court. The report explains which categories have been held to be constitutionally permissible or impermissible, both at the elementary and secondary school level and at the postsecondary level.

The Defense Base Closure and Realignment Act of 1990 (Base Closure Act), as amended,generally governs the military base realignment and closure (BRAC) process. (2) After three previous BRACrounds, Congress authorized a fourth round for 2005, which is now underway. (3) The BRAC process involves a complex statutory scheme, under which numerousgovernmental entities play a role in recommending bases to be closed or realigned. A brief summaryof the major steps in the process is illustrated in Figure 1 on the following page. In addition toestablishing the basic framework for the BRAC process, the Base Closure Act sets forth a varietyof selection criteria and mandatory procedures, such as the requirements that certain information bedisclosed and that certain meetings be made open to the public This report analyzes whether judicial review is available when plaintiffs allege that theDepartment of Defense (DOD), the independent BRAC Commission (Commission), or the Presidenthas either (1) failed to comply with procedural requirements of the Base Closure Act or (2) failedto properly apply specified selection criteria in making BRAC determinations. Congress couldemploy numerous strategies to attempt to "enforce" the Base Closure Act. (4) However, this report focuseson the effect a failure to comply would have if Members of Congress or other parties sued based onan alleged failure to comply with the Act's provisions. (5) In particular, the report synthesizes key federal court decisions thataddress three potential bases for judicial review of BRAC-related actions: the AdministrativeProcedure Act (APA), the Base Closure Act, and the U.S. Constitution. Figure 1: The BRAC Process (6) Additional CRS reports addressing a variety of BRAC issues are also available. (7) The Administrative Procedure Act (APA) provides for judicial review of "final agencyaction," (8) unless either oftwo exceptions applies: (1) when a statute precludes judicial review or (2) when "agency action iscommitted to agency discretion by law." (9) In Dalton v. Specter , Members of Congress and other plaintiffs sought to enjoin the Secretaryof Defense (Secretary) from closing a military installation during a previous BRAC round becauseof alleged substantive and procedural violations of the Base Closure Act. (10) Specifically, plaintiffsalleged that the Secretary's report and the Commission's report were subject to judicial review underthe APA. (11) In Dalton , the Supreme Court held that the issuances of the Secretary's report and theCommission's report were not judicially reviewable actions under the APA because they were not"final agency action[s]." (12) The Court explained that "'[t]he core question' for determiningfinality [of agency action under the APA is] 'whether the agency has completed its decisionmakingprocess, and whether the result of that process is one that will directly affect the parties.'" (13) Because the Base ClosureAct established a process under which the President takes the final action that affects militaryinstallations (see Figure 1 on the previous page), the actions of the Secretary and the Commissiondid not directly affect the parties. (14) Thus, the Court held that they were unreviewable under theAPA. (15) The Dalton decision affirmed the analysis in Cohen v. Rice , in which the First Circuit statedthat the President's statutory right to affect the BRAC process meant that previous steps of the BRACprocess were not final. (16) As the Cohen court explained: Under the 1990 Act, the President is not required tosubmit the Commission's report to Congress. In addition, the 1990 Act gives the President the powerto order the Commission to revise its report, and, in the final analysis, the President has the powerto terminate a base closure cycle altogether via a second rejection of a Commission report. (17) In addition, a subsequent Supreme Court decision described the BRAC reports as "purely advisory"and subject to the "absolute discretion" of the President, thus making them non-final agency actionfor APA purposes. (18) Importantly, the Dalton Court applied its analysis of finality under the APA to bothsubstantive claims (applying improper selection criteria) and procedural claims (e.g., failing to makecertain information public). (19) Therefore, the lack of finality in BRAC actions taken by theSecretary or the Commission bars judicial review of such actions under the APA. (20) Four Justices concurred in the Dalton Court's judgment that judicial review was not availableunder the APA, but argued in a separate concurring opinion that the Court should not have decidedthe issue of whether the agency actions were final. (21) The foundation for this argument is that under the APA, judicialreview is not available if statutes preclude judicial review. (22) Justice Souter -- writing for these four Justices -- argued that "the text, structure, and purposeof the Act compel the conclusion that judicial review of the Commission's or the Secretary'scompliance with it is precluded" (except for certain environmental objections to base closureimplementation plans). (23) Souter's opinion concluded that Congress intended for BRACactions to be "quick and final, or [for] no action [to] be taken at all." (24) Souter cited a variety of evidence to support the contention that Congress generally intendedto preclude judicial review under the Base Closure Act: (25) statutorily-mandated strict time deadlines for making and implementing BRACdecisions "the all-or-nothing base-closing requirement at the core of theAct" congressional frustration resulting from previous attempts to close militarybases "nonjudicial opportunities to assess any procedural (or other) irregularities,"(i.e., the opportunities for the Commission and the Comptroller General to review the Secretary'srecommendations, the President's opportunity to consider procedural flaws, and Congress'sopportunity to disapprove the recommendations) "the temporary nature of the Commission" the fact that the Act expressly provides for judicial review regarding objectionsto base closure implementation plans under the National Environmental Policy Act of 1969 (NEPA)that are brought "within a narrow time frame," but the Act does not explicitly provide for any otherjudicial review Importantly, whether the Supreme Court applies the rationale of the Dalton majority orJustice Souter's Dalton concurrence, the Court would likely decide not to review the BRAC actionsof the Secretary or the Commission under the APA in the 2005 round. Under the APA, judicial review of agency action is not available if "agency action iscommitted to agency discretion by law." (26) Even if the actions of the Secretary or the Commission were heldto be final agency action (which would be unlikely, given the Dalton decision), courts might considerthose agency actions to be committed to agency discretion by law -- thus making them judiciallyunreviewable. (27) Because there is a "strong presumption that Congress intends judicial review of administrativeaction," "clear and convincing evidence" of contrary congressional intent must exist in order for thisexception to judicial review to apply. (28) The issue of whether actions of the Secretary or the Commission under the Base Closure Actare committed to agency discretion by law has not been adjudicated by the Supreme Court. Instead,several Supreme Court cases have addressed this issue in non-BRAC contexts and one D.C. Circuitcase addressed the applicability of the exception to the Base Closure Act. These cases are analyzedin the following paragraphs. In Heckler v. Chaney , the Supreme Court explained that the exception for agency actionbeing committed to agency discretion applies if "a court would have no meaningful standard againstwhich to judge the agency's exercise of discretion." (29) The Court continued, saying that "if no judicially manageablestandards are available for judging how and when an agency should exercise its discretion, then itis impossible to evaluate agency action for 'abuse of discretion,' [as provided for in 5 U.S.C. SS706]." (30) In National Federation , the D.C. Circuit found that the criteria DOD and the Commissionuse for making BRAC determinations do not provide judicially manageable standards, as requiredby the Heckler test. (31) The D.C. Circuit articulated the rationale for its finding: [T]he subject matter of those criteria is not 'judiciallymanageable' . . . . [because] judicial review of the decisions of the Secretary and the Commissionwould necessarily involve second-guessing the Secretary's assessment of the nation's military forcestructure and the military value of the bases within that structure. We think the federal judiciary isill-equipped to conduct reviews of the nation's military policy. (32) Based on this finding, the National Federation court held that application of the selection criteriato military installations during the BRAC process is agency action committed to agency discretionby law, thus making it judicially unreviewable under the APA. (33) More recently, the Supreme Court observed that this exception has generally applied in threecategories of cases: (1) cases involving national security; (2) cases where plaintiffs sought judicial review of an agency's refusal to pursue enforcementactions; and (3) cases where plaintiffs sought review of "an agency's refusal to grant reconsideration of anaction because of material error." (34) Although the Base Closure Act may not fit squarely within any of those three categories, theSupreme Court might adopt the D.C. Circuit's construction of the exception from NationalFederation were it to construe the exception in the context of BRAC. In Dalton , the Supreme Court held that the President's approval of the Secretary's BRACrecommendations was not judicially reviewable under the APA, because the President is not anagency. (35) Althoughthe APA's definition of an "agency" does not explicitly include or exclude the President, (36) the Court had previouslyheld that the President is not subject to the APA, due to separation of powers principles. (37) The Dalton Court distinguished between two types of potential claims: (1) claims that thePresident exceeded his statutory authority and (2) claims challenging the constitutionality of thePresident's actions. (38) The Court stated that not every case of ultra vires conduct by an executive official was ipso facto unconstitutional. (39) In Dalton , the lower court had held that the President would be acting in excess of his statutoryauthority under the Base Closure Act if the Secretary or the Commission had failed to comply withstatutorily-required procedures during previous stages of the BRAC process. (40) On appeal, the SupremeCourt characterized this claim as a statutory claim -- not as a constitutional claim. (41) The Court assumed arguendo that some statutory claims against the President could bejudicially reviewable apart from the APA. (42) However, it stated that statutory claims are not judiciallyreviewable apart from the APA "when the statute in question commits the decision to the discretionof the President." (43) According to the Court, the Base Closure Act did not limit the President's discretion in anyway. (44) Thus, thePresident's authority to approve the BRAC recommendations was "not contingent on the Secretary'sand Commission's fulfillment of all the procedural requirements imposed upon them by the [BaseClosure] Act." (45) Therefore, the issue of how the President chose to exercise his discretion under the Base Closure Actwas held to be judicially unreviewable. (46) Justice Blackmun, concurring in part and concurring in the judgment, attempted to narrowlydefine the scope of the Dalton decision. (47) He considered the decision to be one that would allow judicialreview of a claim (1) if the President acted in contravention of his statutory authority (e.g., addinga base to the Commission's BRAC recommendations list) or (2) if a plaintiff brought "a timely claimseeking direct relief from a procedural violation" (e.g., a claim that a Commission meeting shouldbe public or that the Secretary should publish proposed selection criteria and allow for publiccomment). (48) However, Justice Blackmun's argument that plaintiffs could seek relief from a proceduralviolation of the Base Closure Act appears to directly conflict with Chief Justice Rehnquist's opinionon behalf of the Dalton majority, which stated: The President's authority to act is not contingent on theSecretary's and Commission's fulfillment of all the procedural requirements imposed upon them bythe [Base Closure] Act. Nothing in SS 2903(e) requires the President to determine whether theSecretary or Commission committed any procedural violations in making their recommendations,nor does SS 2903(e) prohibit the President from approving recommendations that are procedurallyflawed. (49) As mentioned in the preceding section of this report, the Dalton Court explained that claims thatthe President acted in excess of his statutory authority differ from claims that the Presidentunconstitutionally acted in the absence of statutory authority. (50) Specifically, the Courtdistinguished the issues in Dalton from those in Youngstown Sheet & Tube Co. v. Sawyer , alandmark case on presidential powers. (51) The Court said that Youngstown "involved the conceded absence of any statutory authority, not a claim that the President acted in excess of such authority." (52) Because the Base ClosureAct provides statutory authority to the President, the Dalton Court did not find it necessary toexamine the constitutional powers of the President (e.g., the President's powers asCommander-in-Chief). A litigant could also challenge the constitutionality of the Base Closure Act itself. For example,in National Federation , plaintiffs unsuccessfully argued that the 1988 Base Closure Act violated thenon-delegation doctrine and the separation of powers doctrine. (53) However, the BaseClosure Act has not yet been held unconstitutional by any federal appellate courts.

The 2005 round of military base realignments and closures (BRAC) is now underway. TheDefense Base Closure and Realignment Act of 1990 (Base Closure Act), as amended, establishesmandatory procedures to be followed throughout the BRAC process and identifies criteria to be usedin formulating BRAC recommendations. However, judicial review is unlikely to be available toremedy alleged failures to comply with the Base Closure Act's provisions. A synopsis of the relevantlaw regarding the availability of judicial review in this context is included below: The actions of the Secretary of Defense (Secretary) and the independent BRACCommission (Commission) are not considered to be "final agency action," and thus cannot bejudicially reviewed pursuant to the Administrative Procedure Act (APA). Even if a court determined that the actions of the Secretary and the Commission were "final agency action," the court would likely consider the case to fall under oneof two APA exceptions to judicial review: (1) when statutes preclude judicial review or (2) whenagency action is committed to agency discretion by law. The President's actions cannot be judicially reviewed under the APA, becausethe President is not an "agency" covered by the statute. A claim that the President exceeded his statutory authority under the BaseClosure Act has been held to be judicially unreviewable, because the Base Closure Act gives thePresident broad discretion in approving or disapproving BRACrecommendations. Thus, courts would likely allow the BRAC process to proceed even if the Department ofDefense, the Commission, or the President did not comply with the Base Closure Act's requirements. This report was prepared by [author name scrubbed], Law Clerk, under the general supervision of[author name scrubbed], Legislative Attorney. It will be updated as case developments warrant.

Researching current federal legislation includes identifying action on pending or passed legislation and locating the relevant documents or text. Analysis, discussion, or media coverage of pending or passed legislation also has a role in the legislative research process. Such research may be accomplished by using governmental, congressional, or commercial services. Congress.g ov http://www.congress.gov Congress.gov provides Members of Congress, their staff, and the general public access to a wide variety of information, including bill summary and status, bill text, committee referrals and committee reports, sponsors and cosponsors, and Congressional Record text. A version of a bill or resolution will typically appear in Congress.gov a day or two after it is introduced or has had action on the floor of the House or Senate. The text of bills is published by the Government Publishing Office (GPO) and sent to the Library of Congress at various times throughout the day. For an estimate as to when GPO will publish a bill, contact the GPO Congressional Desk for House bill versions at 202-512-0224 or Senate Bill Clerk for Senate bill versions at 202-224-2118. Note that the bill number may not determine the chamber for the most recent version--for example, "H.R. 1792 RS" is a Senate version (RS=Reported in Senate) of a House bill. Guidance in the use of Congress.gov is available at http://www.congress.gov/help . The Congress.gov Alert Service is available to anyone who wants to obtain email alerts regarding action on bills and amendments for subjects that they identify. Once established, alerts run automatically and generate emails Monday through Friday when there is new information. To learn more about alerts and how to create them, a brief video is available at https://www.congress.gov/help/tips/managing-alerts . Congressional Record https://www.gpo.gov/fdsys/browse/collection.action?collectionCode=CREC and available via Congress.gov at http://www.congress.gov . Action on legislation passed or pending in the current Congress, and its status in the legislative process, is reported in the Congressional Record. The Record also contains the edited transcript of activities on the floor of the House and Senate. It is the primary source for the text of floor debates and the official source for recorded votes. The Record is published each day that one or both chambers are in session, except in instances when two or more consecutive issues are printed together. The Record 's Daily Digest section summarizes action in each chamber and identifies committee hearings, new public laws, official foreign travel reports, procedural agreements, Senate unanimous consent agreements, treaties and nominations actions, and committee meetings scheduled for the next legislative day. Indexes for the Record are issued twice a month. The Subject Index section can be used to identify bills by topic, and the History of Bills and Resolutions section tracks action on all legislation. Daily Compilation of Presidential Documents http://www.gpo.gov/fdsys/browse/collection.action?collectionCode=CPD Published by the Office of the Federal Register, the Daily Compilation of Presidential Documents (and its predecessor, the Weekly Compilation of Presidential Documents ) provides the dates on which the President signed or vetoed legislation. It also contains transcripts of presidential messages to Congress, executive orders, press releases, nominations submitted to the Senate, speeches, and other material released by the White House. govinfo.gov https://govinfo.gov The Government Publishing Office launched govinfo.gov as a beta website in February 2016. It is still a work in progress and will eventually replace GPO's Federal Digital System (FDsys). It provides free public access to the full text of official publications from the three branches of the federal government. Several govinfo tutorials and handouts are available on the site. Recorded webinars are also available through the Federal Depository Library Program Academy at https://fdlp.gov/about-the-fdlp/fdlp-academy . GPO Federal Digital System http://www.gpo.gov/fdsys GPO's FDsys is a website that enables GPO to display and deliver information from all branches of the U.S. government. Materials available on FDsys include the full text of bills, the Congressional Record and the Congressional Record Index (which includes a History of Bills and Resolutions section), congressional calendars, public laws, selected congressional reports and documents, the Daily Compilation of Presidential Documents , the Weekly Compilation of Presidential Documents , the Federal Register , and the Code of Federal Regulations . Coverage varies for each of these publications. FDsys will eventually be replaced by govinfo.gov (see entry above). Legislative Information System http://www.lis.gov The predecessor to Congress.gov, the Legislative Information System (LIS), is still available but only to congressional staff. It is as current as Congress.gov and will continue to be available while further developments and improvements are made to Congress.gov. A specific date has not been set but plans are to retire LIS near the end of 2018. Alerts that previously existed in LIS must be recreated in Congress.gov. U. S. House of Representatives Home Page http://www.house.gov This website provides information from and about the House of Representatives, including the following: Congressional calendars House calendars (104 th Congress, 1995-present) http://www.gpo.gov/fdsys/browse/collection.actioncollectionCode=CAL House committee activities http://www.house.gov/committees Directory of Representatives by state, district, and name http://www.house.gov/representatives The chamber's leadership http://www.house.gov/leadership House roll call votes starting with the 101 st Congress, second session (1990) http://clerk.house.gov/legislative/legvotes.aspx Brief descriptions of floor proceedings when the House is in session http://clerk.house.gov/floorsummary/floor.aspx U. S. Senate Home Page http://www.senate.gov This website offers legislative materials from and about the Senate, including the following: Congressional calendars Senate calendars (104 th Congress, 1995-present) http://www.senate.gov/pagelayout/legislative/d_three_sections_with_teasers/calendars.htm Background information on and links to materials on the legislative process, including a "How a Bill Becomes a Law" flowchart http://www.senate.gov/pagelayout/legislative/d_three_sections_with_teasers/process.htm Senate roll call votes starting with the 101 st Congress (1989-1990) http://www.senate.gov/pagelayout/legislative/a_three_sections_with_teasers/votes.htm The chamber's leadership http://www.senate.gov/pagelayout/senators/a_three_sections_with_teasers/leadership.htm Descriptions of the Senate committee system and of individual committees http://www.senate.gov/pagelayout/committees/d_three_sections_with_teasers/committees_home.htm Directories of Senators by name, state, class (term expiration date), and party http://www.senate.gov/general/contact_information/senators_cfm.cfm Glossary of common legislative terms http://www.senate.gov/pagelayout/reference/b_three_sections_with_teasers/glossary.htm House Documents Room http://clerk.house.gov/legislative/housedoc.aspx The House documents website provides links to sources for electronic copies of congressional bills, resolutions, and committee reports via the House Library and GPO's govinfo.gov. Cannon House Office Building 106 9:00 a.m.-6:00 p.m. Monday-Friday Phone: [phone number scrubbed]. A weekly compilation of measures that may be considered on the House floor is available from the Office of the Clerk at http://docs.house.gov . House Legislative Resource Center http://clerk.house.gov/about/offices_Lrc.aspx The Legislative Resource Center (LRC) provides centralized access to all published documents originating in and produced by the House and its committees, the historical records of the House since 1792, and legislative and legal reference resources. Congressional staff can retrieve legislative information and records of the House for congressional offices and the public by contacting the LRC. Cannon House Office Building 135 9:00 a.m.-6:00 p.m. Monday-Friday Phone: [phone number scrubbed] House Library http://library.clerk.house.gov The House Library provides legislative, legal, and general reference services to Members of Congress, congressional staff, and the public. Library staff conducts monthly classes on a variety of topics including how to access and use online resources. The reading room has reference materials and computers on which one may access subscription databases; tours may be arranged upon request. A House Library Portal is available for access by House staff only at http://library.house.gov . Cannon House Office Building 263 9:00 a.m.-6:00 p.m. Monday-Friday Phone: [phone number scrubbed] Senate Library http://webster.senate.gov/library (Not a public access site) The Senate Library serves present and former Senators, Member and committee staff, Senate leadership, and Senate officers. The Library provides legislative, historic, legal, business, and general reference materials and research services. The Senate Library has a reading room, study carrels, computers, and a scanning and microform center; tours are available upon request. Senate Russell Office Building B-15 9 :00 a.m. - 6:00 p.m. Monday-Friday or as long as the Senate is in session Phone: [phone number scrubbed]. Senate Printing and Documents Service http://www.senate.gov/legislative/common/generic/Doc_Room.htm The Senate Documents Room provides copies of bills, reports, Senate documents, and laws. Contact information is as follows: Hart Senate Building Office B-04 9:00 a.m.-5:30 p.m., Monday-Friday Phone: [phone number scrubbed] (availability inquiries only) Fax: [phone number scrubbed] E-mail: [email address scrubbed] Daily Schedule Information Both Senate parties and the House Democratic Party provide daily recorded messages about floor proceedings when they are in session. The House Republican Party no longer has a recording. Call the following numbers for cloakroom recordings: Senate at [phone number scrubbed] (Democratic) or [phone number scrubbed] (Republican) House at [phone number scrubbed] (Democratic) Public Laws Update Service Information on new public law numbers assigned to recently enacted laws is available from the National Archives and Records Administration's Office of the Federal Register Public Laws listserv at https://listserv.gsa.gov/cgi-bin/wa.exe?A2=ind1511&L=PUBLAWS-L&P=65 . This service is strictly for email notification of new laws. Select "Subscribe" under "Options" in the right-hand column. The text of laws is not available through this service. Text is available, on an irregular basis, from GPO's FDsys at http://www.gpo.gov/fdsys/browse/collection.action?collectionCode=PLAW . White House Executive Clerk's Office By way of a recorded message, the Office of the Executive Clerk at the White House provides dates for the following information: presidential signings or vetoes of recent legislation, presidential messages, executive orders, and other official presidential action. If the desired information is not in the taped message, callers can stay on the line to speak with a staffer. The recorded message is available at [phone number scrubbed]. The inclusion of a web-based product under this heading does not imply CRS endorsement. Bloomberg Government https://www.bgov.com A subscription database that provides analysis as well as content from news sources worldwide. Services include alerts; transcripts; searchable legislation; congressional, state, and district profiles; and more. Coverage for most historical data begins with the 109 th Congress (2005-2006). CQ.com ( Plus.CQ.com ) http://www.cq.com Plus.CQ.com is an updated version of the CQ.com ( Congressional Quarterly) subscription database that provides bill texts, summaries, tracking, and analysis. Among its other features are forecasts of major pending bills; versions of bills; links to related bills; roll-call votes; legislative histories; floor and committee schedules; detailed committee coverage; texts of committee reports; transcripts of witnesses' testimony; and publications such as CQ Weekly , CQ Almanac , the Congressional Record , and Roll Call . Time spans covered vary by the category of information. The latest addition to the product is a collection of CQ markup reports on each Member's profile page. The markups are only for the current Congress and appear to be from each committee on which a Member serves. Plus.CQ.com is available in all Senate offices and the House Library. GovTrack http://www.govtrack.us GovTrack is a free service that can help determine the status of U.S. federal legislation, voting records for the Senate and the House of Representatives, information on Members of Congress, congressional district maps, and the status of legislation. State legislative information is also available. Federal legislation may be searched and browsed back to the 93 rd Congress (1973-1974) and the text of legislation is available as far back as the 106 th Congress (1999-2000). GovTrack also provides useful bill statistics, such as bill counts by Congress, from the 96 th Congress (1979-1980) to the present. Legislation can be searched by dockets and by subjects, and a bill search and track feature is available. GovTrack's core mission is to make legislative data freely available so that others can build new tools to promote civic education and engagement. HeinOnline http://heinonline.org HeinOnline is a searchable digital library of current and historical materials, including some congressional documents back to 1789. The database also includes legal journals, texts, cases, statutes, regulations, presidential materials, and treaties, as well as international and foreign legal journals, cases, and materials. Many are full text in the original page-image (PDF) format. HeinOnline is available only to subscribers. National Journal https://www.nationaljournal.com The National Journal Group covers the current political environment and emerging policy trends. Its information products include National Journal , T he Hotline , NationalJournal.com , The Almanac of American Politics , National Journal Daily , and National Journal On Air . All House and Senate offices have online access to NationalJournal.com, National Journal Daily , and National Journal Hotline , as well as to the print versions of National Journal Daily and the weekly National Journal Magazine . ProQuest Congressional http://congressional.proquest.com This database contains detailed abstracts and links to the full text of many congressional and federal documents, such as the Congressional Record , congressional hearing transcripts, committee prints, and legislative histories. Length of coverage varies depending on the category of information. This is the enhanced web-based counterpart of the CIS/Index to Publications of the United States Congress . This resource is fee-based and accessible only to subscribers. ProQuest Congressional is available to all House and Senate offices. Qu o rum http://quorum.us Quorum provides detailed analytics on everything related to Congress and its Members. Launched in January 2015, Quorum provides federal level tracking for bills, votes, amendments, floor statements, press releases, Dear Colleague Letters, and a full suite of social media posts as far back as the 101 st Congress (1989). There is a major focus on grassroots engagement tools that enable Members, advocates, legislative professionals, companies, and citizens to influence the legislative process. Quorum also allows users to track issues and to search for and monitor legislation and dialogue across all 50 states. The product uses ESRI geospatial technology and Census data in a legislative platform to provide unique characteristics of each congressional district. Many reviewers and users have dubbed Quorum "Google for Congress." This is a fee-based subscription service. VoteView https://voteview.com Hosted by UCLA's Department of Political Science and Social Computing, Voteview allows users to view every congressional roll call vote since 1789 on a map of the United States and on a liberal-conservative ideological map, including information about the ideological positions of voting Senators and Representatives. It also provides Geographic Information System (GIS) boundaries for congressional districts back to 1789. This beta product has a "geography" tab that allows the user to enter an address or ZIP Code to create a historical list of all Members who represented that district. This is an update to a DOS-based product developed by Keith T. Poole and Howard Rosenthal at Carnegie-Mellon University between 1989 and 1992 . Regulations are issued by federal departments and agencies under the authority delegated to them by federal law. Final rules are printed in the Federal Register (FR) and later codified by subject in the Code of Federal Regulations (CFR) . Code of Federal Regulations http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR The CFR codifies final rules having general applicability and legal effect that first appeared in the F ederal R egister . CFR titles are arranged by subject, and the entire CFR is revised annually (one-quarter of the titles at a time) in January, April, July, and October. Because the annual revision incorporates new regulations and drops superseded ones, the CFR reflects regulations in effect at the time of printing. An index volume that includes tables accompanies the set. By using the FR and CFR sources, with their many finding aids, it is possible to identify existing regulations in a subject area or those that pertain to a specific title and section of the United States Code , identify regulations issued pursuant to a specific public law, and find proposed regulations that are not yet final. The Electronic Code of Federal Regulations, https://www.ecfr.gov (e-CFR), is the current, updated version of the CFR . However, it is not an official legal edition of the CFR , but an unofficial editorial compilation of CFR material and FR amendments produced by the National Archives and Records Administration's Office of the Federal Register (OFR) and GPO. The OFR updates the e-CFR daily. Federal Register http://www.gpo.gov/fdsys/browse/collection.action?collectionCode=FR The FR contains the official announcement of regulations and legal notices issued by federal departments and agencies. It includes proposed and final federal regulations having general applicability and legal effect; executive orders and presidential proclamations; documents required to be published by an act of Congress; and other federal documents of public interest. Daily and monthly indexes and an accompanying publication, "List of CFR Sections Affected," aid in its use. The FR also publishes the "Unified Agenda of Federal Regulatory and Deregulatory Actions" twice yearly (usually in April and October). This document provides advance notice of proposed rulemaking by listing all rules and proposed rules that more than 60 federal departments, agencies, and commissions expect to issue during the next six months. Regulations that concern the military or foreign affairs, or that deal with agency personnel, organization, or management matters, are excluded. The agenda is available online from 1994 through the present. govinfo.gov https://govinfo.gov See entry under "Researching Current Federal Legislation-- Governmental Sources " above. GPO Federal Digital System http://www.gpo.gov/fdsys See entry under "Researching Current Federal Legislation-- Governmental Sources " above. RegInfo.gov http://www.reginfo.gov The Office of Management and Budget (OMB) and the General Services Administration (GSA) produce the RegInfo.gov website, which provides a list of all rules undergoing Office of Information and Regulatory Affairs (OIRA) E.O. 12866 regulatory review. Updated daily, it also provides a list of all rules on which review has been concluded in the past 30 days, lists and statistics on regulatory reviews dating back to 1981, and letters to agencies regarding regulatory actions. Regulations.gov http://www.regulations.gov This website was launched to enhance public participation in federal regulatory activities. Users can search Proposed Rules and Regulations from more than 176 federal departments and agencies along with notices from the Federal Register . Many proposed regulations include a link to a comment form that readers can complete and submit to the appropriate department or agency. Regulations.gov is updated each business day with proposed new regulations. Among the database's search options are keyword or subject, department or agency name, regulations published today, comments due today, open regulations or comments by publication dates, docket ID, Regulation Identifier Number, or CFR citations. W hite House Executive Clerk's Office See entry under "Schedule and Legislative Update Services" above. The inclusion of a web-based product under this heading does not imply CRS endorsement. BNA's Daily Report for Executives http://dailyreport.bna.com This online report covers a broad spectrum of issues, providing news reports and links to the full text of key documents, such as proposed and final legislation, regulations, testimony, and fact sheets summarizing major issues. Available in electronic and print formats to paid subscribers. Federal Regulatory Director y https://us.sagepub.com/en-us/nam/federal-regulatory-directory/book245062 This link leads to product description and purchase information for the Federal Regulatory Directory , which provides profiles of the mandates and operations of more than 100 federal regulatory agencies and is published every two years. Each profile gives a brief history and description of the agency and its regulatory oversight responsibilities and lists key staff, information sources, legislation, and regional offices. It also provides an overview of the federal regulatory process. Other aids are the full texts of key regulatory acts and executive orders, a guide to using the Federal Register and the Code of Federal Regulations , and subject and name indexes. HeinOnline http://heinonline.org See entry under " Nongovernmental Sources of Federal Legislation " above. Print and web-based media sources provide useful background information on the status of federal legislation and regulations through their reporting, political analysis, and editorial perspectives. The inclusion of a web-based product under this heading does not imply CRS endorsement of the product. CQ.com (Plus.CQ.com) http://www.cq.com In addition to the legislative analysis and tracking role of this fee-based subscription service, CQ.com provides a daily news feature, full-text of CQ Weekly , Budget Tracker for articles on appropriations bills and continuing resolutions, and a variety of CQ specialty news sources, including CQ Healthbeat . RSS news feeds are also provided as news occurs. CQ Roll Call http://www.rollcall.com CQ Roll Call , a daily newspaper, has been covering Capitol Hill news since 1955. It is free to congressional staff, both online and in print. C-SPAN.org http://www.c-span.org C-SPAN is a private, nonprofit company, created in 1979 by the cable television industry as a public service. Its mission is to provide public access to the political process. The Hill http://www.thehill.com The Hill is a newspaper for and about Congress. It is published Tuesday, Wednesday, and Thursday when Congress is in session and Wednesday only when Congress is out of session. Politico http://www.politico.com Politico.com covers political news with a focus on national politics, Congress, Capitol Hill, the presidential elections, lobbying, and advocacy. Politico Pro https://www.politicopro.com This premium subscription service goes beyond the standard political news coverage of its sister publication, Politico. According to its website, Politico Pro was launched in June 2010 to provide "access to intense Politico -style coverage of Washington's most important policy issues." It currently covers 14 issue areas: agriculture, budgets & appropriations brief, campaigns, cybersecurity, defense, education, eHealth, energy, Europe brief, financial services, health care, employment and immigration, technology, trade, transportation, and tax. Introduction to Legislative Research This two-and-a-half-hour seminar, offered six times a year by the Law Library of Congress and CRS, is designed for those with no legal research experience. A Law Library specialist will discuss the print and electronic sources used when conducting federal legislative research. Participants will be shown where and how to use the various print and electronic resources containing bills, enacted laws, and codified laws. In addition to covering the official and unofficial print publications, the seminar will demonstrate the relative strengths and substantive content of various Internet resources, such as Congress.gov, GPO's govinfo.gov, and others. This program is open to interns who have attended the CRS Intern Orientation. To register, go to http://www.crs.gov/Events/category/3 , and select the "Register" tab. Federal Legislative History Research: Using Print and Electronic Resources This two-and-a-half-hour seminar is offered four times a year. It examines methods of identifying and locating electronic and print versions of legislative history resources, including committee reports, hearings, debates, and other relevant materials. Research techniques are illustrated using a case study. The seminar emphasizes both Internet and traditional print research techniques. It is jointly sponsored by the Law Library of Congress and CRS. A Law Library specialist will discuss various electronic and print publications containing federal laws and how to research the legislative history of those laws. Participants will be shown where and how to locate electronic and print versions of congressional documents, including bills, resolutions, committee reports and prints, and floor debates that are generated in the legislative process. Sources of compiled legislative histories and methods of compiling legislative histories will be covered. Internet sources will be discussed, including Congress.gov and other Library of Congress sites, GPO's govinfo.gov, various congressional sites, and others. Fee-based databases such as Lexis or Westlaw will not be covered. This program is open to interns who have attended the CRS Intern Orientation. To register, go to http://www.crs.gov/Events/category/3 , and select the "Register" tab. Federal Statutory Research: Using Print and Electronic Resources This seminar examines methods of identifying and locating print and electronic versions of statutes and conducting research in the United States Code . It describes historical sources of federal statutory law and illustrates research techniques using case studies. The Law Library of Congress and the Congressional Research Service jointly sponsor this seminar, which emphasizes both Internet and traditional print research techniques. Knowledge of the U nited S tates Code and Legislative Procedure is a prerequisite for this program. A Law Library specialist will discuss electronic and print chronological and topical publications containing federal statutory law, including electronic and print sources of public laws and the United States Code . The seminar will cover the organizational principles and features facilitating research, the historical development of federal statutory publications, and the significance of enactment of titles of the United States Code into positive law. Internet sources will be discussed, including Congress.gov and other Library of Congress sites, various congressional sites, GPO's govinfo.gov, Cornell's Legal Information Institute site, and others. Fee-based databases such as Lexis or Westlaw will not be covered. This program is open to interns who have attended the CRS Intern Orientation. To register, go to http://www.crs.gov/Events/category/3 , and select the "Register" tab. Introduction to Congress Courses CRS regularly provides classroom instruction to congressional staff on legislative process and procedure. Two such courses are available to House and Senate staff: Congress: An Introduction to Resources and Procedure. This is an all-day program designed for those seeking a better understanding of the legislative process and the resources available to monitor it. The program is not open to interns. Attendance at this program is a prerequisite for the Advanced Legislative Process Institute Seri es (see below). Registration information is available at http://www.crs.gov/Events/category/4 .Legislative Concepts. CRS also offers a monthly introductory "Legislative Concepts" class to House staff and interns in the House Learning Center. Information is available on HouseNet at https://housenet.house.gov/training under "Training." Advanced Legislative Process Institute This Institute builds on the basic procedures and resources provided in "Congress: An Introduction to Resources and Procedure." In-depth sessions describe processes and procedural strategy that are specific to each chamber. Additional information on this class and others can be found at http://www.crs.gov/ under the "Events" tab. House Advanced Legislative Process Institute Series (HALPS) This overview of the "other chamber" includes a description of the Senate's rules and norms, and salient committee and floor procedures, focusing on those that differ from the House. Other discussion will cover the Senate's orientation toward individuals and minorities; its attitude toward and use of committees; its norm of collective scheduling of legislation; its use of motions to proceed, unanimous consent, and time agreements to call up, consider, and amend measures; the role of the presiding officer; holds; filibusters; and invoking cloture. This program is not open to interns. Register at http://www.crs.gov/Events/category/4 . Senate Advanced Legislative Process Institute Series (SALPS) This overview of the "other chamber" is an introduction to the organization and operation of the House with an emphasis on differences in procedure and their impact on legislation. Please note, registration is separate for each session. Register at http://www.crs.gov/Events/category/4 . This program is not open to interns. Note: A calendar year listing of CRS classes is not available. The class listings appear on the CRS Events page a few weeks before the scheduled date and when registration is open. Additional information on researching legislation and regulations is provided in the following CRS reports. CRS Report R43056, Counting Regulations: An Overview of Rulemaking, Types of Federal Regulations, and Pages in the Federal Register , by [author name scrubbed]. CRS Report RL32240, The Federal Rulemaking Process: An Overview , coordinated by [author name scrubbed]. CRS Report RL30812, Federal Statutes: What They Are and Where to Find Them , by [author name scrubbed]. CRS Report 98-309, House Legislative Procedures: Published Sources of Information , by [author name scrubbed]. CRS Report R41865, Legislative History Research: A Guide to Resources for Congressional Staff , by [author name scrubbed]. CRS Report RS21363, Legislative Procedure in Congress: Basic Sources for Congressional Staff , by [author name scrubbed] and [author name scrubbed]. CRS Report RS20120, Legislative Support Resources: Offices and Websites for Congressional Staff , by [author name scrubbed] and [author name scrubbed]. CRS Report 98-673, Publications of Congressional Committees: A Summary , by [author name scrubbed]. CRS Report 98-308, Senate Legislative Procedures: Published Sources of Information , by [author name scrubbed].

This report is designed to introduce congressional staff to selected governmental and nongovernmental sources that are useful in tracking and obtaining information on federal legislation and regulations. It includes governmental sources, such as Congress.gov, the Government Publishing Office's Federal Digital System (FDsys), and U.S. Senate and House websites. Nongovernmental or commercial sources include resources such as HeinOnline and the Congressional Quarterly (CQ) websites. The report also highlights classes offered by the Congressional Research Service (CRS) and the Law Library of Congress. This report will be updated as new information is available.

The National Directory of New Hires (NDNH) is a database of personal information and wage and employment information of American workers. Employers are required by P.L. 104-193 to send new hire reports to the State Directory of New Hires, which then sends the required information to the NDNH. States also are required to send quarterly wage information of existing employees (in UC-covered employment) and unemployment compensation claims information to the NDNH. Federal employers (i.e., agencies) send their new hire reports and quarterly wage information directly to the NDNH. A new hire report contains six data elements on new employees, which include the name, address, and Social Security number of each new employee and the employer's name, address, and tax identification number. The NDNH contains three components. (1) The first component of the NDNH is the new hires file (i.e., report). It contains information that is also on each employee's W-4 form. (2) The second component of the NDNH is the quarterly wage file. The quarterly wage file contains quarterly wage information on individual employees in UC-covered employment. This information comes from the records of the State Workforce Agencies (sometimes called State Employment Security Agencies) and the federal government. When an individual has more than one job, separate quarterly wage records are established for each job. (3) The third component of the NDNH is the Unemployment Compensation file. The Unemployment Compensation file contains information pertaining to persons who have received or applied for unemployment compensation, as reported by State Workforce Agencies. With respect to this file, the state can only submit information that is already contained in the records of the state agency (i.e., generally the State Workforce Agency) that administers the Unemployment Compensation program. Thus, the NDNH obtains its data from State Directories of New Hires, State Workforce Agencies, and federal agencies. The NDNH, itself, is a component of the Federal Parent Locator Service (FPLS), which is maintained by the federal Office of Child Support Enforcement (OCSE) and is housed at the Social Security Administration's National Computer Center in Baltimore, MD. According to the Department of Health and Human Services (HHS), during FY2010 about 672 million records were posted to the NDNH. The original purpose of the NDNH was to help states locate child support obligors who were working in other states so that child support could be withheld from the noncustodial parent's paycheck. It is estimated that about 30% of child support cases involve noncustodial parents who do not live in the same state as their children. States generally use NDNH data rather than state new hire data or state quarterly wage data because they are more likely to acquire earnings information about noncustodial parents who have obtained work or claimed unemployment insurance benefits in a different state, or who are employed by the federal government. Moreover, because many noncustodial parents are in temporary employment or move from job to job, the quick reporting of information on new hires greatly increases the likelihood that the NDNH will be able to locate a noncustodial parent and pass on the information to states, so that the Child Support Enforcement (CSE) agencies can collect child support via income withholding before the noncustodial parent changes jobs. Since its enactment in 1996, access to the NDNH has been expanded, mostly to prevent fraud and abuse, to certain other programs and agencies (discussed later). Employers are required to collect from each newly hired employee and transmit to the State Directory of New Hires a report that contains the name, address, and Social Security number of the employee and the employer's name, address, and tax identification number. Most states require only these six basic data elements in each new hires report; some states require or request additional information. The State Directory of New Hires is required to submit its new hire reports to the NDNH. New hire reports must be deleted from the NDNH 24 months after the date of entry. For CSE purposes, quarterly wage and unemployment compensation reports must be deleted 12 months after entry unless a match has occurred in the information comparison procedures. The reporting and deletion requirements result in a constant cycling of wage and employment data into and out of the NDNH. (The HHS Secretary may keep samples of data entered into the NDNH for research purposes. ) The HHS Secretary has the authority to transmit information on employees and employers contained in the new hires reports to the Social Security Administration (SSA), to the extent necessary, for verification. SSA is required to verify the accuracy of, correct, or provide (to the extent possible) the employee's name, Social Security number, and date of birth and the employer's tax identification number. According to OCSE, all Social Security numbers on new hire reports and unemployment compensation files are verified by SSA before the information is added to the database of the National Directory of New Hires. Quarterly wage files, however, often do not include all of the necessary elements for a successful verification. In such situations, the information is transmitted to the NDNH, but it is flagged indicating that SSA was not able to verify the Social Security number and name combination. Employers must provide a new hires report on each newly hired employee to the State Directory of New Hires generally within 20 days after the employee is hired. The new hires report must be entered into the database maintained by the State Directory of New Hires within five business days of receipt from an employer. Within three business days after the new hire information from the employer has been entered into the State Directory of New Hires, the State Directory of New Hires is required to submit its new hire reports to the NDNH. Within two business days after the new hire information is received from the State Directory, the information must be entered into the computer system of the NDNH. For purposes of locating individuals in a paternity establishment case or a case involving the establishment, modification, or enforcement of child support, the HHS Secretary must compare information in the NDNH against information in the child support abstracts in the Federal Child Support Case Registry at least every two business days. If a match occurs, the HHS Secretary must report the information to the appropriate state CSE agency within two business days. The CSE agency is then required to instruct, within two business days, appropriate employers to withhold child support obligations from the employee's paycheck, unless the employee's income is not subject to withholding. Quarterly wage information on existing employees is required to be transmitted to the NDNH from the State Workforce Agencies within four months of the end of a calendar quarter. However, some states report quarterly wage data to the NDNH on a monthly or weekly basis. Federal agencies are required to transmit quarterly wage information on federal employees to the NDNH no later than one month after the end of a calendar quarter. Unemployment compensation information (which comes from State Workforce Agencies) is required to be transmitted to the NDNH within one month of the end of a calendar quarter. In order to safeguard the privacy of individuals in the NDNH, federal law requires that the OCSE restrict access to the NDNH database to "authorized" persons. Moreover, the NDNH cannot be used for any purpose not authorized by federal law. Thus, in order for any agency not mentioned in this section to gain access to the NDNH, Congress must authorize a change in law. The HHS Secretary is required to share information from the NDNH with state CSE agencies, state agencies administering the Title IV-B child welfare program, state agencies administering the Title IV-E foster care and adoption assistance programs, state agencies administering the Temporary Assistance for Needy Families (TANF) program, the Commissioner of Social Security, the Secretary of the Treasury (for Earned Income Tax Credit purposes and to verify income tax return information), and researchers under certain circumstances. P.L. 106-113 (enacted in November 1999) granted access to the Department of Education. The provisions were designed to improve the ability of the Department of Education to collect on defaulted student loans and grant overpayments. OCSE and the Department of Education negotiated and implemented a computer matching agreement in December 2000. P.L. 108-199 (enacted in January 2004) granted access to the Department of Housing and Urban Development. The provisions were designed to verify the employment and income of persons receiving federal housing assistance. P.L. 108-295 (enacted in August 2004) granted access to the State Workforce Agencies responsible for administering state or federal Unemployment Compensation programs. The provisions were designed to determine whether persons receiving unemployment compensation are working. P.L. 108-447 (enacted in December 2004) granted access to the Department of the Treasury. The provisions were designed to help the Treasury Department collect nontax debt (e.g., small business loans, Department of Veterans Affairs (VA) loans, agricultural loans, etc.) owed to the federal government. P.L. 109-250 (enacted in July 2006) granted access to the state agencies that administer the Food Stamp program. These provisions were designed to assist in the administration of the Food Stamp program. P.L. 110-246 (enacted in June 2008) changed the Food Stamp program references to the Supplemental Nutrition Assistance Program (SNAP). P.L. 113-79 (enacted in February 2014) required all state SNAP agencies (rather than giving them the option) to data-match with the NDNH at the time of SNAP certification for the purposes of determining eligibility to receive SNAP benefits and determining the correct amount of those benefits. P.L. 110-157 (enacted in December 2007) requires the Secretary of Veterans Affairs to provide the HHS Secretary with information for comparison with the National Directory of New Hires for income verification purposes in order to determine eligibility for certain veteran benefits and services. It requires the Secretary to (1) seek only the minimum information necessary to make such a determination; (2) receive the prior written consent of the individual before seeking, using, or disclosing any such information; (3) independently verify any information received prior to terminating, denying, or reducing a benefit or service; and (4) allow an opportunity for an individual to contest negative findings. P.L. 110-157 terminated the New Hires Directory comparison authority for the VA Secretary at the end of FY2011 (i.e., September 30, 2011). P.L. 112-37 (enacted in October 2011) extended the termination date to November 18, 2011. During the period from November 19, 2011, through September 29, 2013, the provision was not in effect. The Department of Veterans Affairs Expiring Authorities Act of 2013 ( P.L. 113-37 ) made the provision effective beginning September 30, 2013, and for 180 days thereafter. The NDNH is almost unanimously viewed as a successful and pivotal element of the CSE program. According to HHS, in FY2010 4.7 million noncustodial parents and putative fathers were located through the NDNH, up from 2.8 million in FY1999 (a 68% increase). The NDNH, however, does not provide information on the self-employed nor does it include hours worked or industry/occupation-related data. Since the establishment of the NDNH, federal law has been amended six times to expand access of more programs and agencies to the NDNH (listed above). Although Congress specifically included several provisions that would safeguard the information in the NDNH, some advocacy groups are concerned that as more agencies and programs are granted access to the NDNH, the potential for mismanagement of the database and accidental or intentional misuse of confidential information escalates. The NDNH is a database that contains personal and financial data on nearly every working American, as well as those receiving unemployment compensation. The size and scope of the NDNH has continued to cause much concern over whether the privacy of individuals will be protected. In addition to the data security safeguards, federal law includes privacy protection provisions that require the removal or deletion of certain information in the NDNH after specified time periods. It has been argued that stronger safeguards may be needed to prevent the unauthorized intrusion into the personal and confidential information of millions of Americans associated with the NDNH. The federal government and states administer numerous benefit programs that provide aid, in cash and noncash form, to persons with limited income. In theory, all of these programs could use the employment and income information contained in the NDNH to verify program eligibility, prevent or end unlawful or erroneous access to program benefits, collect overpayments, or assure that program benefits are correct. Some observers are worried that more of these federal and state programs will try to obtain access to the NDNH. They contend that expanded or wider access to, and use of, these data could potentially lead to privacy and confidentiality breaches, financial fraud, identity theft, or other crimes. They also are concerned that a broader array of legitimate users of the NDNH may conceal the unauthorized use of the personal and financial data in the NDNH. Some policymakers maintain that, although many agencies and programs could potentially benefit from access to the NDNH, those entities will not pursue access because many of these agencies currently do not have the computer capacity or capability to use an automated system such as the NDNH. Many of these agencies and programs are administered at the local level where computer availability is limited or computer capability to interface with the automated NDNH is nonexistent. Moreover, many of the privacy protections and strict security requirements tied to the NDNH may be administratively burdensome for many agencies. Finally, some child support advocates are concerned that the wider access to the NDNH may have negative repercussions for the CSE program in that as other programs and agencies use the NDNH effectively and find matches in cases that involve an overpayment, those agencies will want to collect their money and may use income withholding as the mechanism to do so. Thus, these other programs will be in direct competition with the CSE program for the income of noncustodial parents.

The National Directory of New Hires (NDNH) is a database that contains personal and financial data on nearly every working American, as well as those receiving unemployment compensation. Contrary to its name, the National Directory of New Hires includes more than just information on new employees. It is a database that includes information on (1) all newly hired employees, compiled from state reports (and reports from federal employers), (2) the quarterly wage reports of existing employees (in Unemployment Compensation (UC)-covered employment), and (3) unemployment compensation claims. The NDNH was originally established to help states locate noncustodial parents living in a different state so that child support payments could be withheld from that parent's paycheck. Since its enactment in 1996, the NDNH has been extended to several additional programs and agencies to verify program eligibility, prevent or end fraud, collect overpayments, or assure that program benefits are correct. Although the directory is considered very effective, concerns about data security and the privacy rights of employees remain a part of debates regarding expanded access to the NDNH.

From the ear liest days of commercial radio, the Federal Communications Commission (FCC) and its predecessor, the Federal Radio Commission, have encouraged diversity in broadcasting. The FCC's policies seek to encourage four distinct types of diversity in local broadcast media: diversity of viewpoints, as reflected in the availability of media content reflecting a variety of perspectives; diversity of programming, as indicated by a variety of formats and content, including programming aimed at various minority and ethnic groups; outlet diversity, to ensure the presence of multiple independently owned media outlets within a geographic market; and minority and female ownership of broadcast media outlets. In addition to promoting diversity, the FCC aims, with its broadcast media ownership rules, to promote localism and competition by restricting the number of media outlets that a single entity may own or control within a geographic market and, in the case of broadcast television stations, nationwide. Localism addresses whether broadcast stations are responsive to the needs and interests of their communities. In evaluating the extent of competition, the FCC considers whether stations have adequate commercial incentives to invest in diverse news and public affairs programming tailored to serve viewers within their communities. Section 202(h) of the Telecommunications Act of 1996 ( P.L. 104-104 ) directs the FCC to review its media ownership rules every four years to determine whether they are "necessary in the public interest as a result of competition," and to "repeal or modify any regulation it determines to be no longer in the public interest." Section 257(b) of the act directs the FCC to promote policies favoring the diversity of media voices and vigorous economic competition. In 2004, 2011, and 2016, the U.S. Court of Appeals for the Third Circuit directed the FCC to review its broadcast ownership diversity policies in conjunction with the media ownership rules. In August 2016, the FCC completed the 2014 Quadrennial Review of its media ownership rules and diversity policies (2016 Diversity Order). The decision contained rules related to (1) the determination and disclosure of media ownership (attribution rules); (2) limits on the type and number of media properties a single entity may own (media ownership rules); and (3) rules designed to enhance media ownership diversity. The new media ownership rules became effective December 1, 2016. The National Association of Broadcasters, Nexstar Broadcasting Inc. (an operator of broadcast television stations), and Connoisseur Media (an operator of radio stations) filed petitions with the FCC requesting that the agency reconsider its 2016 decision by repealing and/or relaxing the media ownership rules, and adopting rules creating a new "incubator program" to enhance ownership diversity. In November 2017, acting in response to the reconsideration petitions, the FCC repealed and/or relaxed several rules and adopted rules creating an incubator program while asking for additional comments on how to implement it (2017 Reconsideration Order). Most of the changes became effective in February 2018, while others, related to the FCC's collection of data, became effective in March 2018 following approval of the Office of Management and Budget (OMB). In August 2018, the FCC issued rules governing a new incubator program. Parties, including the Prometheus Radio Project, have appealed these orders. The U.S. Court of Appeals for the Third Circuit is scheduled to hear arguments regarding the legal challenges to all of the FCC's recent broadcast media ownership rule changes. The FCC's next quadrennial media ownership review is scheduled to begin in 2018. The Consolidated Appropriations Act, 2004 ( P.L. 108-199 ) directed the FCC to adopt rules that would cap the reach of a single company's television stations at 39% of U.S. television households. In addition, Congress exempted this national ownership cap from the FCC's required review of its media ownership rules every four years. In December 2017, the FCC initiated a rulemaking proceeding in which it proposed to eliminate or modify that national audience reach cap. In the proceeding, the FCC sought comments on whether the agency has the authority to modify or eliminate the national cap, and noted that previously the agency had rejected arguments that Congress precluded the FCC from making any adjustment. For more information about the history of the national ownership rule, see Table A-1 . The debate over media ownership rules is occurring against the background of sweeping changes in news consumption patterns. Figure 1 illustrates these general trends. Based on surveys conducted by Pew Research Center, the percentage of adults citing local broadcast television as a news source declined from 65% in 1996 to 37% in 2017. The percentage of respondents who stated that they "got news yesterday" from online sources grew from 2% in 1996 to 43% in 2017, marking the first time that online sources outranked local broadcast television. In contrast, those citing printed newspapers as a source they "read yesterday" or use regularly declined from 50% in 1996 to 18% in 2016. Broadcast radio also has declined in importance as a source of news. These trends raise questions as to whether common ownership of multiple media outlets in the same market might limit diversity of viewpoints as much today as two decades ago. As broadcast stations face competition for viewers' attention from other media outlets, and thereby financial pressures, some have sought to strengthen their bargaining relative to program suppliers (i.e., broadcast networks), advertisers, and/or programming distributors (i.e., cable and satellite operators) by consolidating. For example, in an agreement that was subsequently rescinded, Sinclair Broadcast Group proposed to acquire Tribune Media Company, thereby making it the largest owner of broadcast television stations in the United States. In November 2017, Entercom Communications completed its merger with CBS Radio Inc., making it the largest radio operator in the United States in terms of revenue. In June 2018, Gray Television announced that it would purchase Raycom Media Inc. in a $3.65 billion transaction that would enable Gray to reach one-fourth of U.S. households. The extent to which such media consolidation can occur is directly related to the FCC media ownership and attribution rules in place at the time. Two characteristics of broadcast television and broadcast radio stations determine whether or not the media ownership rules described in later sections of this report are triggered: (1) the geographic range (or contours ) of their signals, and (2) the limits of their media markets as determined by the Nielsen Company, a market research firm. The FCC uses Designated Market Areas (DMAs) to determine the geographic regions that apply to the duopoly rule, and uses broadcast television signals to determine when the rules are triggered within DMAs. Following the transition of broadcast stations from analog to digital signals in 2009, the FCC modified the media ownership rules to reflect two digital television service contours: 1. The digital "principal community contour" (digital PCC). This contour specifies the signal strength required to provide television service to a station's community of license. The FCC sought, when defining the digital PCC, to provide television stations with flexibility in siting and building their facilities while still preventing stations from straying too far from their respective communities of license. 2. The digital "noise limited service contour" (digital NLSC). The FCC designed this contour to define a geographic area in which at least 50% of residents can receive the signal a majority of the time. The FCC wanted to ensure that after the digital transition, broadcasters would be able to reach the same audiences they served previously with analog transmissions. The FCC uses DMAs created by the Nielsen Company to define local television markets. Nielsen has constructed 210 DMAs by assigning each county in the United States to a specific DMA, based on the predominance of viewing of broadcast television stations licensed to operate in a given metropolitan statistical area, defined by the OMB. The 1 millivolt-per-meter (1 mv/m) contour for FM radio represents a signal that will result in satisfactory service to at least 70% of the locations on the outer rim of the contour at least 90% of the time. In its rules for AM radio stations, the FCC delineates three types of service areas: (1) primary, (2) secondary, and (3) intermittent. Some classes of radio stations render service to two or more areas, while others usually have only primary service areas. The FCC defines the primary service area of an AM broadcast radio station as the service area in which the groundwave is not subject to objectionable interference or fading. The signal strength required for a population of 2,500 or more to receive primary service is 2 millivolts per meter (2 mv/m). For communities with populations of fewer than 2,500, the required signal strength is 0.5 mv/m. When the FCC first proposed incorporating AM contour signals in its media ownership rules, it noted that "a one mv/m AM signal is somewhat less than the signal intensity needed to provide service to urban populations, but somewhat greater than the signal at the outer limit of effective non-urban service." The FCC also relies on the Nielsen Company to define local radio markets. These markets, called "Metros," generally correspond to the metropolitan statistical areas defined by the OMB, but are subject to exceptions based on historical industry usage or other considerations at the discretion of Nielsen. In contrast to television markets, radio markets do not include every U.S. county. To determine the number of radio stations within a radio market, the FCC uses a database compiled and updated by BIA Kelsey, another market research firm. Many licensees of commercial broadcast television and radio stations have relationships that allow others to exert substantial influence over the operation and finances of those licensees' stations. FCC rules prohibit unauthorized transfers of control of licenses, including de facto transfers of control. To help it enforce its media ownership rules, the FCC has developed attribution rules "to identify those interests in or relationships to licensees that confer a degree of influence or control such that the holders have a realistic potential to affect the programming decisions of licensees or other core operating functions." In such cases, the FCC may deem an entity to influence a broadcast station's operations and finances to a degree that triggers the FCC's media ownership rules, even when the FCC does not consider the entity to be the official licensee. The following summarizes the media attribution rules, as described and modified in the 2017 Reconsideration Order, and related FCC policies. Joint sales agreements (JSAs) enable the sales staff of one broadcast station to sell advertising time on a separately owned station within the same local market. In 2016, the FCC adopted rules specifying that television JSAs allowing the sale of more than 15% of the weekly advertising time on a competing local broadcast television station are attributable as ownership or control. Congress subsequently twice extended the period by which parties must terminate a television JSA in order to comply with the FCC's rule limiting ownership of multiple television stations within a DMA (see " Local Television Ownership Rule (Television Duopoly Rule) "), ultimately extending the deadline to September 30, 2025. The FCC's rules also specified that stations must file copies of attributable television JSAs with the commission. In its 2017 Reconsideration Order, the FCC eliminated the television JSA attribution rule. The FCC determined that JSAs can promote the public interest, and that this provides an independent reason for eliminating the Television JSA Attribution Rule.... [They] have created efficiencies that benefit local broadcasters--particularly in small- and medium-sized markets--and have enabled these stations to better serve their communities." With the repeal of the JSA attribution rule, broadcast television stations are no longer required to file copies of their JSAs with the FCC. However, broadcast television stations must still make copies of JSAs available in their public inspection files. These files are available for review on the FCC website. A JSA among commercial radio stations, whereby one station sells 15% or more of another same-market station's advertising time, is attributable for the purpose of applying the local radio ownership rule. In August 2016, the FCC adopted new disclosure requirements for all joint operating agreements, broadly encompassed by the term shared services agreements (SSAs) among broadcast television stations. In its 2017 Reconsideration Order, the FCC upheld the SSA disclosure rule, which became effective in March 2018 following approval from the OMB. The FCC defines an SSA as any agreement or series of agreements, whether written or oral, in which (1) a station provides any station-related services including, but not limited to, administrative, technical, sales, and/or programming support, to a station that is not directly or indirectly under common de jure control permitted under the [FCC's] regulations; or (2) stations that are not directly or indirectly under common de jure control permitted under the [FCC's] regulations collaborate to provide or enable the provision of station-related services, including, but not limited to, administrative, technical, sales, and/or programming support, to one or more of the collaborating stations. In this definition, the term station includes the licensee, including any subsidiaries and affiliates, and any other individual or entity with an attributable interest in the station. Each station that is a party to an SSA, whether in the same or different television markets, must file a copy of the SSA in its online public inspection file. The stations may redact confidential or proprietary information. The stations must also report the substance of oral SSAs in writing to the FCC. SSA disclosure requirements do not apply to noncommercial television stations, radio stations, and newspapers. The FCC declined to make SSAs attributable, and emphasized that its action "was not a pretext for future regulation of SSAs." The FCC stated that any consideration of the regulatory status of these agreements in the future must reflect "significant study and understanding of the impact of these agreements on station operations and a complete account of the public interest benefits these agreements help facilitate." Broadcast stations that outsource management to other stations are known as sidecars . In March 2014, the FCC's Media Bureau issued a public notice stating that it would closely scrutinize any proposed transaction that includes sidecar agreements in which two (or more) broadcast stations in the same market enter into an arrangement to share facilities, employees, and/or services, or to jointly acquire programming or sell advertising and enter into an option, right of first refusal, put/call arrangement, or other similar contingent interest, or a loan guarantee. In February 2017, the FCC's Media Bureau rescinded this guidance. Nielsen ranks each DMA by the estimated number of television households. It estimated that as of January 2018, the New York DMA contained more than 7 million television households, reaching 6.309% of U.S. television households, making it the number one DMA in the country. In contrast, Nielsen estimated that the Glendive, MT, market was the smallest DMA in the country (ranked number 210), with 4,030 television households, representing 0.004% of U.S. television households. The FCC uses Nielsen's estimates of television households to determine the national audience reach of broadcast television station group owners, for the purpose of applying the national ownership cap. In 1985 the FCC adopted a rule that, for the purpose of applying its national ownership rule, discounted the number of television households reached within a DMA by stations operating in the Ultra High Frequency (UHF) band by half in measuring a station owner's reach. This adjustment reflected the physical limitations of UHF signals, which generally provided poorer picture quality than signals in the Very High Frequency (VHF) band at the time the rule was adopted. However, on June 12, 2009, broadcast television stations completed a transition from analog to digital service pursuant to a statutory mandate. As a result of this switch, UHF stations had a technological advantage, and more broadcast television licenses began to operate on these frequencies. By December 2009, 73% of the 1,392 commercial stations operated in the UHF band. In September 2013, under then-Acting FCC Chairwoman Mignon Clyburn, the FCC proposed eliminating the UHF discount, citing the completed transition to digital broadcasting. In September 2016, the FCC, under then-Chairman Thomas Wheeler, eliminated the UHF discount effective November 2016. In a dissenting statement, then-Commissioner Ajit Pai contended that the FCC lacked the authority to review the UHF discount without simultaneously reviewing the national audience cap. In April 2017, after Commissioner Pai became chairman, the FCC reinstated the UHF discount. With the discount, a single entity that owns exclusively UHF stations could effectively reach 78% of U.S. television households, or double the current national ownership cap of 39% of U.S. television households. In December 2017, the FCC launched a new rulemaking proceeding to examine whether to modify or rescind the UHF discount and national ownership cap. For more information about the history of the UHF discount and national ownership cap, see Table A-1 . When parties request that the FCC allow them to transfer broadcast television licenses, they must ensure that they comply with all FCC rules, including the FCC's media ownership rules. In the event of a transfer of operational and financial agreements involving broadcast stations, rather than an actual license, the parties need not discuss how such arrangements relate to the national ownership rule. In contrast to its attribution rules regarding local media ownership, the FCC has not issued a formal rulemaking regarding its treatment of sharing, sales, operating, and financial agreements, with respect to national media ownership. Instead, it has either articulated its policy on an ad hoc basis in reviewing merger applications, or remained silent. For example, in 2013, when Local TV LLC applied to the FCC to transfer control of its broadcast television station licenses to Tribune Media Company and Dreamcatcher Broadcasting LLC, Tribune proposed that Dreamcatcher would be the new licensee of Local TV's stations in the Norfolk-Portsmouth-Newport News, VA, and Wilkes Barre-Scranton-Hazelton, PA, television markets. Tribune, however, would operate the stations pursuant to shared services agreements (but not joint sales agreements). The FCC's media bureau (but not the full commission) [d]isagree[d] with [opponents of the proposed arrangement] that the facts here show that Tribune will be operating the Dreamcatcher Stations as though it owned them outright. Dreamcatcher will be run by a highly experienced broadcaster, with established independence from Tribune. Because Tribune already owned newspapers in those markets, it did not attempt to take control of the broadcast licenses in those markets in order to comply with the FCC's now-defunct rule prohibiting common ownership of newspapers and television stations within the same DMA (described in " Newspaper/Broadcast Cross-Ownership Rule "). FCC's Media Bureau staff did not, however, directly address how this determination applied to the national ownership rule. Four years later, when Tribune applied to the FCC to transfer control of its broadcast licenses to Sinclair Broadcast Group, the FCC commissioners raised concerns, and in July 2018 they designated the proposed transaction for a hearing before an FCC administrative law judge. Among their concerns was that Sinclair's proposed sale of Tribune's Chicago station WGN-TV could effectively be a "sham" transaction because (1) the proposed buyer had no previous experience in broadcasting, (2) the proposed buyer served as CEO of a company in which Sinclair's executive chairman had a controlling interest, (3) the proposed buyer would have purchased the station at a price that appeared to be significantly below market value, (4) Sinclair would have had an option to buy back the station in the future, (5) Sinclair would have owned most of WGN-TV's assets, and (6) pursuant to a number of agreements, Sinclair would have been responsible for many aspects of the station's operation. The FCC commissioners stated, "Such facts raise questions about whether Sinclair was the real party in interest under Commission rules and precedents and attempted to skirt the Commission's broadcast ownership rules." The FCC commissioners were silent, however, with respect to how, post-transaction, Sinclair's potential remote operation of four television stations within the Wilkes-Barre-Scranton-Hazleton, PA, television market might cause it to breach the national ownership cap. In Wilkes Barre-Scranton-Hazelton alone, Sinclair operates three stations remotely and Tribune operates one. While Sinclair's and Tribune's investor presentation about their transaction highlighted Wilkes Barre as a market common to the two companies, the FCC's designated hearing order did not. As the FCC has been addressing attribution on a case-by-case basis, it is unclear how it would treat such relationships with respect to enforcing national ownership limits in the future. For example, this matter may arise again when the FCC reviews Gray Television's proposed acquisition of stations from Raycom. In the Ottumwa, IA-Kirksville, MO television market, Raycom operates, but is not the licensee of, a station that airs programming from the FOX and NBC networks. Gray does not own any stations in the market. In Gray's investor presentation regarding its proposed merger with Raycom, it highlights Ottumwa as a "Raycom" market, thus implying that it intends to operate the station upon completion of the transaction. It is unclear whether Gray's operation of the station would cause control to be attributed to Gray if future transactions might enable Gray's stations to reach 39% of all U.S. television households, the national limit for a single owner. This issue also would have arisen had Sinclair pursued its proposed merger with Tribune. In Sinclair's final amendment to its merger application, it offered to sell certain stations in order to comply with the national ownership cap (assuming the UHF discount remained in place). Sinclair would nonetheless have reached more than 39% of U.S. television households if the four Wilkes Barre stations, which it would have operated but would not have owned, had been included in the calculation. The FCC has five distinct sets of rules governing ownership of multiple media outlets in a single market: (1) local television ownership rules (known as the television duopoly rules); (2) local radio ownership rules; (3) radio/television cross-ownership rules; (4) newspaper/broadcast cross-ownership rules; and (5) the dual network rule. The local television ownership rule (known as the television duopoly rule) limits common ownership of television stations serving the same geographic region. An entity may own or control two television stations in the same television market, so long as the overlap of the stations' signals is limited and the joint control does not include two of the four most widely watched stations within the market. The FCC may, however, make exceptions to the "top four" prohibition on a case-by-case basis, depending on the conditions of a particular DMA. The FCC initially adopted a TV duopoly rule in 1941, barring a single entity from owning two or more broadcast television stations that "would substantially serve the same area." In 1964, the FCC adopted the signal overlap component of the rules. The FCC sought to limit "future ownership to a maximum of two stations in most states and, thus ... act indirectly to curb regional concentrations of ownership as well as overlap itself." In 1999, the FCC adopted the "top four ranked/eight voice" test, under which it would approve a merger among two of the "top four" stations so long as at least eight independently owned and operating commercial or noncommercial full-power broadcast television stations would remain in the DMA after the proposed combination was consummated. It also adopted the waiver criteria. The "top four ranked" stations in a local market generally are the local affiliates of the four major English-language broadcast television networks--ABC, CBS, Fox, and NBC. The rules apply to the stations' ranking at the time they apply for common ownership. While making some technical modifications, the FCC retained the television duopoly rules in 2016. In its 2017 Reconsideration Order, the FCC eliminated the "eight voices" component of the test. Furthermore, it decided that in applying the restriction on ownership of two top-four-ranked stations in the same market, it would conduct case-by-case evaluations to account for circumstances in which the application of the prohibition may be unwarranted. The FCC found that the modification to the television duopoly rule would not be likely to harm minority and female ownership of broadcast stations. Table 1 summarizes the rules, including waiver circumstances. In 2016, the FCC retained its "failed station/failing station" waiver test. Under this policy, to obtain a waiver of the local television (duopoly) rule, an applicant must demonstrate that (1) one of the broadcast television stations involved in the proposed transaction is either failed or failing; (2) the in-market buyer is the only reasonably available candidate willing and able to acquire and operate the station; and (3) selling the station to an out-of-market buyer would result in an artificially depressed price. The FCC declined to relax its criteria for determining whether a station is failing or failed, stating that parties might be able to manipulate the data used to determine the criteria. The local radio ownership rule limits ownership of radio stations serving the same geographic area. In 2017, the FCC adopted a presumptive waiver of the local radio ownership rule in limited circumstances. In contrast to the television duopoly rule, the FCC does not have failed/failing station waiver criteria for the local radio ownership rule. FCC first adopted rules limiting ownership of FM radio stations serving "substantially the same service area" in 1940. In 1943, the FCC adopted a rule limiting ownership of AM radio stations "where such station renders or will render primary service to a substantial portion of the primary service area of another [AM] broadcast station." In 1964, the FCC amended the rule to use the service contours of FM and AM stations to define the service area. The FCC first adopted a rule limiting ownership of AM and FM stations serving the same area in 1970 and amended them in 1989. In 1992, to address the fact that many radio stations were facing difficult financial conditions, the FCC relaxed the radio ownership rule to establish numerical limits on radio station ownership based on the total number of commercial stations within a market, rather than on whether their signals overlapped. Congress directed the FCC to set new caps, according to instructions laid out in Section 202(b) of the Telecommunications Act of 1996. These limits, described in Table 2 , remain in place today. In 2016, the FCC retained the local radio ownership rule, asserting the following: This competition-based rule indirectly advances our diversity goal by helping to ensure the presence of independently owned broadcast radio stations in the local market, thereby increasing the likelihood of a variety of viewpoints and preserving ownership opportunities for new entrants. In 2016, the FCC clarified certain aspects of its local radio ownership rule. One of the clarifications related to the application of the rule in cases when Nielsen changes the boundaries of radio markets (i.e., Nielsen Audio Metros). In another clarification, the FCC stated that in Puerto Rico, the FCC will use radio station signal contour overlaps, rather than the Nielsen Audio Metro, to apply the local radio ownership rule due to topographical and market conditions. In 2017, the FCC eliminated the radio/television cross-ownership rule. This rule prohibited an entity from owning more than two television stations and one radio station within the same DMA, unless the DMA met certain criteria. The FCC found that it could no longer justify retention of the rule in light of broadcast radio's diminished contributions to viewpoint diversity and the variety of other media outlets that contribute to viewpoint diversity in local markets. The FCC reaffirmed its previous conclusion in 2016 that the radio/television cross-ownership rule is not necessary to promote competition or localism. The FCC also determined that the elimination of the rule would not likely have a negative impact on minority and female ownership. The FCC repealed the newspaper/broadcast cross-ownership (NBCO) rule in 2017. The rule prohibited common ownership of a daily print newspaper and a full-power broadcast station (AM, FM, or TV) if the station's service contour encompassed the newspaper's community of publication. The FCC found that prohibiting newspaper/broadcast combinations was no longer necessary to serve the agency's goal of promoting viewpoint diversity in light of the multiplicity of sources of news and information in the current media marketplace and the diminished role of daily print newspapers, and therefore did not serve the public interest. The FCC noted that given its conclusion in 2003 that the rule was not necessary to promote the goals of competition or localism, and could potentially hinder localism, viewpoint diversity had remained its principal rationale for maintaining the NBCO rule. The FCC determined repealing the NBCO rule could potentially promote localism by enabling local news outlets to achieve efficiencies by combining resources needed to gather, report, and disseminate local news and information. Furthermore, the FCC concluded that eliminating the NBCO rule would not have a material impact on minority and female ownership. The dual network rule (described in detail at 47 C.F.R. SS73.658(g)) prohibits common ownership of two of the "top four" networks but otherwise permits common ownership of multiple broadcast networks. Generally, the four broadcast networks covered by this definition are ABC, CBS, Fox, and NBC. The FCC did not address the dual network rule in its 2017 Reconsideration Order, and the rule therefore remains in effect. The FCC first adopted this rule, which originally prohibited ownership of any two networks, with respect to radio in 1941, as part of the Chain Broadcasting Report . The FCC directed the rule at NBC, the only company at that time with two radio networks. The FCC found that the operation of two networks gave NBC excessive control over its affiliated broadcast radio stations, and an unfair competitive advantage over other broadcast radio networks. The FCC extended the dual network rule to television networks in 1946. Section 202(e) of the Telecommunications Act of 1996 directed the FCC to revise its dual network rule. Per the act, the FCC modified the rule to enable common ownership of two networks, as long as one of the networks was not among the top four networks (i.e., ABC, CBS, FOX, and NBC). In 2001, the FCC revised the rule to permit one of the four major networks to jointly own one of those emerging networks, which have since merged into the CW network. Today, the CBS Corporation has a partial ownership interest in the CW broadcast network. In 2016, the FCC retained the "dual network" rule without modification, in order to foster its goals of preserving competition and localism. Table 3 summarizes the public-interest rationales for each of the media ownership rules. The FCC has a long history of attempts to adopt rules to encourage diverse broadcast station ownership, including ownership by women and members of minority groups. Examples of the FCC's attempts are described within several of its past media ownership reviews, including the adoption of the Failed Station Solicitation Rule and the establishment of a class of "eligible entities" that could qualify for relaxed ownership rules, attribution rules, and more flexible licensing policies than their counterparts. As a result of this history, and appeals of previous FCC actions imposing rules to foster diversity of broadcast ownership, the Third Circuit Court of Appeals is overseeing the FCC's efforts to foster diversity of broadcast station ownership. In 2016, the FCC adopted a new order (2016 Diversity Order) containing rules designed to increase broadcast ownership diversity. In accordance with a Third Circuit directive, the agency submitted the rules to the court. In its 2016 Diversity Order, the FCC reinstated the revenue-based eligible entity standard, using the Small Business Administration's definition of a "small business." The FCC had also used this revenue-based eligible entity standard in its previous 2008 ownership diversity rulemaking (2008 Diversity Order). Under this definition, entities that own broadcast stations and have total annual revenue of $38.5 million or less qualify for certain construction, licensing, transaction, and auction measures, described below. The FCC adopted six measures in the 2016 Diversity Order that are designed to enable eligible entities to abide by less restrictive media ownership and attribution rules, and more flexible licensing policies, than their counterparts. Table 4 describes the six measures. Similar to the reinstated definition of eligible entities, these measures are the same as those previously adopted in the FCC's 2008 Diversity Order. To justify this decision, the FCC reasoned that "we continue to believe that enabling more small businesses to participate in the broadcast industry will encourage innovation and promote competition and viewpoint diversity." It added that whether or not such measures would specifically lead to increased broadcast ownership by women and minorities has no bearing on whether the measures will promote small business participation in the broadcast industry. Interested parties have appealed the 2016 Diversity Order to the Third Circuit. As part of its reconsideration of the Quadrennial Media Ownership order in 2017, the FCC established a new incubator that provides a broadcast radio ownership rule waiver to a broadcaster that establishes a program to help facilitate station ownership for a certain class of owners. In addition, the FCC launched a new rulemaking proceeding seeking comment on how to implement the program. The FCC issued rules governing the incubator program in August 2018. Most of the rules became effective on September 27, 2018. Information collection requirements are subject to review by the OMB, pursuant to Section 3507(d) of the Paperwork Reduction Act of 1995 ( P.L. 104-13 ). Under the incubator program, an established radio broadcaster will provide financial and operational support, including training and mentoring, to a new or small radio broadcaster. At the end of a successful incubation relationship, the new or small broadcaster will either own and operate a new station independently, or be on a firmer financial footing. Once an incubation relationship is completed successfully, the established broadcaster will be eligible to receive a waiver of the FCC's Local Radio Ownership Rule, subject to certain requirements. In the order, the FCC did not foreclose the possibility of eliminating or further relaxing its local radio ownership rule in the 2018 Quadrennial Review. The FCC noted that Congress would be able to adopt legislation either authorizing or mandating tax certificates and tax credits in the agency's incubator program, either in addition to or in lieu of the FCC local radio ownership rule waiver. Furthermore, the FCC stated that following the completion of the 2018 Quadrennial Review, it might consider expanding the incubator program to apply to television stations. In addition, it stated that "were Congress to provide an alternative benefit for incubating broadcasters, we would be strongly inclined to expand the program to include television stations." National Ownership Rule History

The Federal Communications Commission (FCC) aims, with its broadcast media ownership rules, to promote localism and competition by restricting the number of media outlets that a single entity may own or control within a geographic market and, in the case of broadcast television stations, nationwide. In addition, the FCC seeks to encourage diversity, including (1) the diversity of viewpoints, as reflected in the availability of media content reflecting a variety of perspectives; (2) diversity of programming, as indicated by a variety of formats and content; (3) outlet diversity, to ensure the presence of multiple independently owned media outlets within a geographic market; and (4) minority and female ownership of broadcast media outlets. Two FCC media ownership rules have proven particularly controversial. Its national media ownership rule prohibits any entity from owning commercial television stations that reach more than 39% of U.S. households nationwide. Its "UHF discount" rule discounts by half the reach of a station broadcasting in the Ultra-High Frequency (UHF) band for the purpose of applying the national media ownership rule. In December 2017, the commission opened a rulemaking proceeding, seeking comments about whether it should modify or repeal the two rules. If the FCC retains the UHF discount, even if it maintains the 39% cap, a single entity could potentially reach 78% of U.S. households through its ownership of broadcast television stations. An important issue with respect to the national ownership cap, which the FCC has not addressed in a rulemaking, is how the agency treats a situation in which a broadcaster manages, operates, or sells advertising for a television station owned by another. In some cases, the FCC has articulated its policy on an ad hoc basis in the context of merger reviews, while in other instances it has effectively consented to such arrangements through its silence. Thus, a single entity could comply with the national ownership cap while still influencing broadcast television stations it does not own, reaching more viewers than permitted under the cap. For example, in reviewing the now-cancelled proposed merger between Sinclair Broadcast Group and Tribune Media Company in 2018, FCC commissioners raised concerns that Sinclair's proposed sale of Tribune's Chicago station WGN-TV in order to comply with the national ownership cap could effectively be a "sham" transaction due to Sinclair's relationships with the proposed buyer. Nevertheless, neither Sinclair's application nor the FCC's order for a designated hearing addressed whether Sinclair's intention to operate four television stations owned by others within the Wilkes-Barre-Scranton-Hazleton, PA, television market might cause it to breach the national ownership cap. In November 2017, acting in response to petitions from broadcast station licensees, the FCC repealed or relaxed several local media ownership rules. The repealed rules limited common ownership of broadcast television and radio stations within the same market, and of television stations and newspapers within the same market. The FCC also relaxed rules limiting common ownership of two top-four television stations (generally, ABC, CBS, FOX, and NBC stations) within the same market. In August 2018, the FCC issued rules governing a new "incubator" program designed to enhance ownership diversity. Parties, including the Prometheus Radio Project, have appealed these orders. The U.S. Court of Appeals for the Third Circuit is scheduled to hear arguments regarding the legal challenges to all of the FCC's recent broadcast media ownership rule changes. The FCC plans to launch its next quadrennial media ownership review later this year. These regulatory changes are occurring against the background of significant changes in media consumption patterns. Based on surveys conducted by Pew Research Center, the percentage of adults citing local broadcast television as a news source declined from 65% in 1996 to 37% in 2016. As broadcast stations face competition for viewers' attention from other media outlets, and thereby financial pressures, some station owners have sought to strengthen their positions by consolidating. The extent to which such media consolidation can occur is directly related to the FCC media ownership and attribution rules in place at the time.

The Transportation, Housing and Urban Development, and Related Agencies (THUD) appropriations subcommittees are charged with drafting bills to provide annual appropriations for the Department of Transportation (DOT), the Department of Housing and Urban Development (HUD), and six small related agencies. Title I of the annual THUD appropriations bill funds DOT. The department is primarily a grant-making and regulatory organization. Its programs are organized roughly by mode of transportation, providing grants to state and local government agencies to support the construction of highways, transit, and intercity passenger rail infrastructure, while overseeing safety in the rail, public transportation, commercial trucking and intercity bus, and maritime industries. The Federal Aviation Administration (FAA) is exceptional among DOT's large sub-agencies in that the largest portion of its budget is not for grants but for operating the U.S. air traffic control system. In support of that task, it employs over 80% of DOT's total workforce, roughly 46,000 of DOT's approximately 56,000 employees. Title II of the annual THUD appropriations bill funds HUD. The department's programs are primarily designed to address housing problems faced by households with very low incomes or other special housing needs. These include several programs of rental assistance for persons who are poor, elderly, and/or have disabilities. Three rental assistance programs--Public Housing, Section 8 Housing Choice Vouchers, and Section 8 project-based rental assistance--account for the majority of the department's funding. Two flexible block grant programs--the HOME Investment Partnership Program and Community Development Block Grants (CDBG)--help communities finance a variety of housing and community development activities designed to serve low-income families. Other, more specialized grant programs help communities meet the needs of homeless persons, including those with AIDS. HUD's Federal Housing Administration (FHA) insures mortgages made by lenders to home buyers with low down payments and to developers of multifamily rental buildings containing relatively affordable units. Title III of the THUD appropriations bill funds a collection of agencies involved in transportation or housing and community development. They include the Access Board, the Federal Maritime Commission, the National Transportation Safety Board, the Amtrak Office of Inspector General (IG), the Neighborhood Reinvestment Corporation (often referred to as NeighborWorks), the U.S. Interagency Council on Homelessness, and the costs associated with the government conservatorship and regulation of the housing-related government-sponsored enterprises, Fannie Mae and Freddie Mac. Most of the programs and activities in the THUD bill are funded through regular annual appropriations , also referred to as discretionary appropriations. This is the amount of new funding allocated each year by the appropriations committees. Appropriations are drawn from the general fund of the Treasury. For some accounts, the appropriations committees provide advance appropriations , or regular appropriations that are not available until the next fiscal year. In some years, Congress will also provide emergency appropriations , usually in response to disasters. These funds are sometimes provided outside of the regular appropriations acts--often in emergency supplemental spending bills--generally in addition to regular annual appropriations. Although emergency appropriations typically come from the general fund, they may not be included in the discretionary appropriation total reported for an agency. Most of the Department of Transportation's budget is in the form of contract authority . Contract authority is a form of mandatory budget authority based on federal trust fund resources, in contrast to discretionary budget authority, which is based on resources in the general fund. Contract authority controls spending from the Highway Trust Fund and the Airport and Airway Trust Fund. When the Appropriations Committee subcommittees are given their 302(b) allocations, those figures include only net discretionary budget authority (nonemergency appropriations, less any offsets and rescissions); contract authority from trust funds is not subject to that limitation. This can lead to confusion when comparing totals, as the total annual discretionary budget authority for THUD is typically around half of the total funding provided in the bill, with the remainder made up of mandatory contract authority. Congressional appropriators are generally subject to limits on the amount of new nonemergency discretionary funding they can provide in a year. One way to stay within these limits is to appropriate no more than the allocated amount of discretionary funding in the regular annual appropriations act. Another way is to find ways to offset a higher level of discretionary funding. A portion of the cost of regular annual appropriations for the THUD bill is generally offset in two ways. The first is through rescissions , or cancellations of unobligated or recaptured balances from previous years' funding. The second is through offsetting receipts and collections , generally derived from fees collected by federal agencies. Table 1 shows funding trends for DOT and HUD over the period FY2009-FY2015, omitting emergency funding and other supplemental funding. The purpose of Table 1 is to indicate trends in the funding for these agencies; thus emergency supplemental appropriations are not included in the figures. Table 2 provides a time line of legislative action on the FY2016 THUD appropriations bill. The annual budget resolution provides a budgetary framework within which Congress considers legislation affecting spending and revenue. It sets forth spending and revenue levels, enforced by the rules of each chamber, including spending allocations to House and Senate Appropriations Committees. After the House and Senate Appropriations Committees receive their discretionary spending allocations from the budget resolution (referred to as 302(a) allocations), they divide their allocations among their 12 subcommittees, each of which is responsible for one of the 12 regular appropriations bills. The allocations to each of the subcommittees are referred to as 302(b) allocations. The FY2016 budget resolution was agreed to by the House on April 30, 2015, and the Senate on May 6, 2015 ( H.Con.Res. 27 and S.Con.Res. 11 ). It set an overall base discretionary spending limit of $1.017 trillion for FY2016, an increase from the FY2015 level of $1.014 trillion and consistent with the current statutory spending limits under the Budget Control Act, as amended. The current Section 302(b) allocation for the Senate THUD subcommittee is $376 million more than that provided for the House subcommittee. This difference creates an additional difficulty in reaching agreement on a final FY2016 THUD appropriation level. Table 3 shows the discretionary funding provided for THUD in FY2015, the Administration request for FY2016, and the amount allocated by the House and Senate Appropriations Committees to the THUD subcommittees. Table 4 lists the total funding provided for each of the titles in the bill for FY2015 and the amount requested for that title for FY2016. As discussed earlier, much of the funding for this bill is in the form of contract authority, a type of mandatory budget authority. Thus, the discretionary funding provided in the bill is only about half of the total funding provided in this bill. As shown in Table 4 , the President's FY2016 budget requested $134.7 billion for the programs in the THUD bill, $27.4 billion more than appropriated for THUD in FY2015. Most of this increase was for highway, transit, and rail funding under the Administration's surface transportation reauthorization proposal; the request for DOT is $22 billion over FY2015. The request for HUD is $5 billion more than provided in FY2015, but $1.1 billion of that increase reflects a decline in savings available from offsetting receipts. The House-passed H.R. 2577 provides a total of $108.7 billion for THUD in FY2016. While this appears to be $1.5 billion over the net budgetary resources amount provided in FY2015, after accounting for a projected $1.1 billion reduction in offsetting receipts to HUD in FY2016 and the effects of $400 million in rescissions of funding in the FY2015 bill, the actual amount of new funding recommended in the House bill is virtually identical to the FY2015 level. The Senate-reported H.R. 2577 recommends $109.1 billion for THUD; after accounting for the differences in rescissions and offsetting receipts in FY2015, this represents an increase of less than 1% over FY2015 funding. This situation is explored further in the next section of this report and Table 5 . In the case of the THUD bill, net discretionary budget authority (which is the level of funding measured against the 302(b) allocation) is not the same as the amount of new discretionary budget authority made available to THUD agencies, due to budgetary savings available from rescissions and offsets. Each dollar available to the subcommittees in rescissions and offsets enables the subcommittee to provide funding that does not count against the 302(b) level. As shown in Table 5 , in FY2015, due to rescissions and offsets, the THUD subcommittees were able to provide $10.1 billion in discretionary appropriations to THUD agencies above the net discretionary budget authority level. The amount of these "budget savings" can vary from year to year, meaning that the "cost" in terms of 302(b) allocation of providing the same level of appropriations may vary as well. Due to a $1.1 billion reduction in offsetting collections in FY2016 compared to FY2015, it "cost" the House THUD subcommittee an additional $1.1 billion in discretionary funding in FY2016 to provide the same level of total funding as provided in FY2015, all else being equal. Combined with a decrease in rescissions in their FY2016 proposal, the House THUD subcommittee's $1.5 billion increase in 302(b) allocation over THUD's net FY2015 level ends up as a $25 million increase. And since the subcommittee also proposed reducing the mandatory funding level by $25 million, the net change for FY2016 becomes zero. Table 6 presents FY2016 appropriations totals and selected accounts for DOT, compared to FY2015 enacted levels. A brief summary of key highlights follows the table. For an expanded discussion, see CRS Report R44063, Department of Transportation (DOT): FY2016 Appropriations , by [author name scrubbed]. For DOT, the House-passed H.R. 2577 would provide the following: $70.6 billion in budgetary resources, $1.0 billion (1%) below the comparable FY2015 level (before rescissions). $100 million (an 80% cut from FY2015) to the National Infrastructure Investment (TIGER grants) program. $1.148 billion (a 17% cut from FY2015) to Amtrak. A 9% ($199 million) cut from FY2015 to the transit Capital Investment Grants (New Starts & Small Starts) program. That no funds may be used to facilitate new scheduled air transportation to Cuba, or to issue a license or certificate for a commercial vessel that docked or anchored within 7 miles of a Cuban port within the previous 180 days. For DOT, the Senate Committee on Appropriations recommended: $71.3 billion in budgetary resources, $368 million (0.5%) below the comparable FY2015 level. The same amount as in FY2015 for National Infrastructure Investment (TIGER grants) and Amtrak grants. A 25% ($535 million) cut from FY2015 for the transit Capital Investment Grants (New Starts & Small Starts) program. The Administration's budget proposal for DOT included the following: A request for $93.7 billion in budgetary resources, an increase of 31% over FY2015. A 150% increase in funding over FY2015 for National Infrastructure Investment (TIGER grants). A 25% increase in funding over FY2015 for the federal-aid highway program. A 69% increase in funding over FY2015 for transit. A 76% increase in funding over FY2015 for Amtrak, plus $2.3 billion for development of other passenger rail service. Table 7 presents an account-by-account summary of FY2016 appropriations proposals for HUD, compared to FY2015 enacted levels. It is followed by a brief summary of key highlights. For an expanded discussion, see CRS Report R44059, Department of Housing and Urban Development: FY2016 Appropriations , coordinated by [author name scrubbed]. For HUD, H.R. 2577 , as reported by the Senate Appropriations Committee ( S.Rept. 114-75 ), would provide: $46.2 billion in gross appropriations, which is approximately $850 million more in appropriations than was provided in FY2015 but about $3 billion less than was requested by the President and $183 million less than was approved by the House. $37.6 billion in net budget authority reflecting savings from offsets and other sources, which is $1.9 billion more than FY2015 ($850 million more in appropriations and $1 billion less in savings from offsets). A 93% cut in funding for HOME relative to FY2015. It proposes no provisions related to the Housing Trust Fund, as proposed in the House. A $100 million decrease in Community Development Block Grant (CDBG) funding relative to FY2015 (-3%), but a $100 million increase over the President's requested funding level. Funding increases to cover the cost of renewing subsidies in the Section 8 tenant-based (Housing Choice Voucher) and project-based rental assistance accounts (+$630 million and +$1 billion relative to FY2015). Proposes funding for new incremental vouchers for homeless youth and homeless veterans. For HUD, the House-passed H.R. 2577 would provide the following: $46.4 billion in gross appropriations, which is approximately $1 billion more in appropriations than was provided in FY2015 but $3 billion less than requested by the President. $37.7 billion in net budget authority, reflecting savings from offsets and other sources, which is $2 billion more than FY2015 ($1 billion more in appropriations and $1 billion less in savings available from offsets). A 15% cut in funding for HOME relative to FY2015, with a provision to supplement that amount by diverting any funding for the Housing Trust Fund to the HOME program. Roughly level funding for the Community Development Block Grant (CDBG) program relative to FY2015, rejecting a cut proposed in the President's budget. Funding cuts (relative to FY2015) for Choice Neighborhoods (-75%) and the Public Housing Capital Fund (-10%). Funding increases to cover the cost of renewing subsidies in the Section 8 tenant-based (Housing Choice Voucher) and project-based rental assistance accounts (+$614 million and +$924 million relative to FY2015). No funding for the new incremental vouchers that were requested in the President's budget. Rejection of the legislative reforms requested by the President, with reference to the authorizing committees being most appropriate to consider such reforms. The President's FY2016 budget request for HUD included the following: $49.3 billion in gross appropriations, which is approximately $4 billion more in gross appropriations than was provided in FY2015. $40.6 billion in net budget authority, reflecting savings from offsets and other sources, which is $5 billion more than FY2015 ($4 billion more in appropriations and $1 billion less in savings available from offsets). Increases in funding for most HUD programs, including funding for 67,000 new incremental Section 8 Housing Choice vouchers. A 7% funding cut for CDBG, with a proposal to revisit the way funding is distributed to communities. Several legislative reform proposals affecting the rental assistance programs, including changes to the way that income is calculated and recertified. Table 8 presents appropriations levels for the various related agencies funded within the Transportation, HUD, and Related Agencies appropriations bill.

The House and Senate Transportation, Housing and Urban Development, and Related Agencies (THUD) appropriations subcommittees are charged with providing annual appropriations for the Department of Transportation (DOT), Department of Housing and Urban Development (HUD), and related agencies. THUD programs receive both discretionary and mandatory budget authority; HUD's budget generally accounts for the largest share of discretionary appropriations in the THUD bill, but when mandatory funding is taken into account, DOT's budget is larger than HUD's budget. Mandatory funding typically accounts for around half of the THUD appropriation. The FY2015 THUD bill's appropriation totaled $107.3 billion: $53.8 billion in net discretionary funding and $53.5 billion in mandatory funding. The Administration requested net budget authority of $134.7 billion (after scorekeeping adjustments) for the agencies funded by the THUD bill for FY2016, an increase of $27.4 billion (26%). Most of this increase was for highway, transit, and passenger rail programs in DOT, reflecting the increased funding proposed in the Administration's surface transportation reauthorization proposal. The House-passed bill (H.R. 2577) includes net budget authority of $108.7 billion for THUD in FY2016, $55.3 billion in discretionary funding and $53.5 billion in mandatory funding. In total, this is a 1% increase over FY2015 levels (+3% discretionary reduced by smaller offsets, about level mandatory funding). The Administration has issued a Statement of Administration Policy for H.R. 2577 criticizing the funding levels and certain provisions in the bill, saying that the President's advisors would recommend that the bill be vetoed. The Senate Committee on Appropriations recommended $109.1 billion in net budget authority and omitted certain provisions that the Administration had objected to, such as limitations on travel to Cuba. DOT: The Administration requested a total of $93.7 billion in discretionary and mandatory funding for DOT for FY2016, an increase of roughly $22 billion (31%) over FY2015. The House-passed H.R. 2577 would provide $70.6 billion for DOT, $646 million less than in FY2015. The reductions were primarily to the TIGER grant program (-$400 million), the New Starts transit grant program (-$199 million), and Amtrak capital grants (-$252 million). The Senate-reported bill recommends $71.3 billion, $35 million below the FY2015 level; the major change from FY2015 levels is a proposed cut of 25% ($535 million) to the New Starts transit grant program. HUD: The President requested $40.6 billion in net new budget authority for HUD for FY2016, $5 billion more than provided in FY2015 ($35.6 billion). The House-passed H.R. 2577 includes $37.7 billion for HUD, $2.1 billion above FY2015. Of that increase, $1.1 billion is attributable to a reduction in savings from offsetting receipts from the Federal Housing Administration (FHA). The bulk of the remainder of the increase is directed to funding the renewal costs of the Section 8 Housing Choice Voucher and project-based rental assistance programs. The Senate-reported H.R. 2577 recommends $37.6 billion in net new budget authority, representing $850 million more in appropriations and $1.1 billion to make up for reduced offsets compared to the FY2015 level. Like the House-passed version, it prioritizes funding for Section 8 rental assistance. Related Agencies: The Administration requested a total of $351 million for the agencies in Title III (the Related Agencies). This is about $1 million more than they received in FY2015. The House-passed H.R. 2577 would provide $342 million for the related agencies, cutting $8 million from the Neighborhood Reinvestment Corporation. The Senate-reported H.R. 2577 recommends $306 million, the $45 million reduction would come from the Neighborhood Investment Corporation. The Senate Committee on Appropriations released a substitute amendment to H.R. 2577 on November 18, 2015; see the "Recent Developments" box on page 3 for detail.

Over several congresses, policymakers have been interested in drug compounding and pharmaceutical supply chain security and have worked to craft legislation to enhance the Food and Drug Administration (FDA) ability to protect the public. On September 25, 2013, the leadership of the Senate Committee on Health, Education, Labor, and Pensions and the House Committee on Energy and Commerce announced an agreement on a bill to cover both topics. The House passed H.R. 3204 , the Drug Quality and Security Act, which now awaits Senate action. Title I is the proposed Compounding Quality Act. Title II is the proposed Drug Supply Chain Security Act. This report provides an overview of the provisions in H.R. 3204 , as passed by the House. This report does not discuss policy implications of the potential passage and implementation of provisions in the bill. Under current law, the Federal Food, Drug, and Cosmetic Act (FFDCA, 21 USC 301 et seq.), the federal government regulates drug manufacturing and sales within the United States. However, the FFDCA provides specific conditions in which a drug may be compounded--primarily that the compounding is done by a pharmacist or physician based on a prescription for an individual patient--for which several FFDCA requirements of manufacturers do not apply. Such compounding is regulated by the states within their authority over the practice of pharmacy. There are, however, entities that perform activities that do not fit within this limited sphere of compounding. Federal regulators, the pharmacy and manufacturing industries, state authorities, and various courts have had differing opinions on who has jurisdiction--FDA or the states--over those activities. Title I of H.R. 3204 , the proposed Compounding Quality Act, attempts to address some of these issues. The act would, among other things: maintain FDA authority to regulate drug compounding that goes beyond the scope of state-regulated practice of pharmacy; establish a new category of compounding entity, termed "outsourcing facility," which would apply to entities that compound sterile drugs, volunteer to register with FDA, and follow practice and reporting requirements; require that the label of a drug from an outsourcing facility state "This is a compounded drug"; dictate user fees to fund outsourcing facility registration and reporting; advisory committee activities; annual reports; the issuing of regulations; and a study by the Government Accountability Office (GAO); and direct enhanced communication among state boards of pharmacy and between those boards and the FDA. To do so, Title I would amend FFDCA Section 503A [21 USC 353a] on pharmacy compounding and add a proposed Section 503B on outsourcing facilities as well as proposed Sections 744J and 744K to give FDA the authority to assess and use outsourcing facility fees. Several provisions in Title I reflect challenges FDA has encountered in implementing FFDCA Section 503A [21 USC 353a], Pharmacy Compounding, in current law. H.R. 3204 would amend that section by removing the provision in current law that restricts a compounder from advertising or promoting a compounded drug. Relatedly, it would also remove the modifier "unsolicited" from the phrase "valid prescription" in referring to what the pharmacy must receive before compounding a drug. H.R. 3204 includes a severability provision indicating that, in the event a provision of the act is declared unconstitutional, the remaining provisions would be unaffected. The remaining provisions in FFDCA Section 503A lay out the circumstances in which a state-regulated pharmacy may compound a drug. Although current law does not use the term, Members of Congress, FDA officials, and others often refer to this as traditional compounding . It involves compounding by a licensed pharmacist or physician in response to a prescription for an individual patient. The section describes what ingredients may be used, what kinds of drugs may not be compounded, required consultation between the HHS Secretary and the National Association of Boards of Pharmacy, and required implementing regulations. For facilities that compound drugs in ways that go beyond the circumstances described by FFDCA Section 503A [21 USC 353a], a proposed Section 503B would allow an entity to voluntarily register as an outsourcing facility . For an outsourcing facility that follows the requirements described in the proposed Section 503B, certain existing requirements that apply to drug manufacturers would be waived. These are: a drug's labeling must provide adequate directions for use or be deemed misbranded (Sec. 502(f)(1)) [21 USC 352]; a manufacturer may sell a drug in the United States only after FDA has approved its new drug application based on evidence of safety and effectiveness and other requirements regarding manufacturing processes, labeling, and reporting (Sec. 505 [21 USC 355]); and supply chain entities (manufacturers, wholesale distributors, dispensers, and repackagers) must comply with activities that would be required by Title II of this Act (proposed Sec. 582). The proposed Section 503B would include requirements that focus on the drug, the outsourcing facility, and the Secretary. A drug that is compounded in a registered outsourcing facility would have to meet the following conditions: may not be made from bulk drug substances unless they comply with limitations specified in this bill on use of bulk drug substances and other ingredients; may not be a drug that has been withdrawn or removed from the market because it was found to be unsafe or not effective; may not be "essentially a copy of one or more approved drugs"; may not be on the Secretary's list of "drugs that present demonstrable difficulties for compounding that are reasonably likely to lead to an adverse effect on the safety or effectiveness of the drug or category of drugs, taking into account the risks and benefits to patients" unless compounding is done "in accordance with all applicable conditions identified on the list ... as conditions that are necessary to prevent" such difficulties; if it is subject to a risk evaluation and mitigation strategy (REMS), the outsourcing facility must demonstrate a plan to use "controls comparable to the controls applicable under the relevant" REMS; may be sold or transferred only by the outsourcing facility that compounded it; must be compounded in an outsourcing facility that has paid fees (as would be established in this Act); must have a label that includes the statement "This is a compounded drug." (or comparable statement); must also contain specified identifying information of the outsourcing facility and the drug to include lot or batch number, established drug name, dosage form and strength, quantity or value, date compounded, expiration date, storage and handling instructions, National Drug Code (if available), "Not for resale" statement, "Office Use Only" statement (if applicable), and a list of active and inactive ingredients; and must have a container "from which individual units of the drug are removed for dispensing or administration" that includes a list of active and inactive ingredients, FDA adverse event reporting information, and directions for use. A registered outsourcing facility must register with the Secretary of Health and Human Services (the Secretary) annually (electronically, unless waived by the Secretary) and indicate whether it intends to compound a drug on the Secretary's list of drug shortages; submit a report to the Secretary twice a year identifying the drugs compounded, including the active ingredient and its source, National Drug Code numbers, and other specified information; be subject to inspection (pursuant to Section 704 [21 USC 374], which applies to manufacturing facilities) according to a risk-based schedule based on factors such as the compliance history of the outsourcing facility, inherent risk of the drugs being compounded, among others; and submit adverse event reports. The Secretary must make outsourcing facility registration information publicly available; and issue regulations regarding the list of drugs presenting demonstrable difficulties for compounding after convening and consulting with an advisory committee (to include specified membership) on compounding; regularly review the lists and update as necessary. The proposed Section 503B would include definitions of compounding, essentially a copy of an approved drug, approved drug, outsourcing facility, and sterile drug. Title I would amend the FFDCA sections involving prohibited acts (Sec. 301 [21 USC 331]) and misbranded drugs (Sec. 502 [21 USC 352]) to include specified actions regarding compounded drugs. It also would direct the Secretary to promulgate implementing regulations. H.R. 3204 would amend the FFDCA to add sections (744J and 744K) addressing user fees. The bill would require the Secretary to collect an annual establishment fee from each outsourcing facility that chooses to register as well as reinspection fees when applicable. The bill specifies the process the Secretary would follow to establish fee amounts, an inflation adjustment factor, an adjustment factor and exceptions for certain small businesses, the crediting and availability of fees, fee collection and the effect of failure to pay fees (which would include deeming a product misbranded and therefore prohibiting its sale). The bill would also require the Secretary to report annually to Congress describing fees collected, entities paying fees, hiring of new staff, use of fees to support outsourcing facility inspections, and the number of inspections and reinspections performed. The Secretary could use those fees "solely to pay for the costs of oversight of outsourcing facilities," and the user fee funds would have to be used "to supplement and not supplant" other available federal funds. A section of H.R. 3204 titled "Enhanced Communication" would direct the Secretary to receive information from state boards of pharmacy regarding (1) actions taken regarding compounding pharmacies (warning letters, sanctions or penalties, suspension or revocation of state license or registration, or recall of a compounded drug) or (2) "concerns that a compounding pharmacy may be acting contrary to [FFDCA] section 503A [21 USC 353a]." The Secretary would be required to consult with the National Association of Boards of Pharmacy in implementing the submission requirement and to immediately notify state boards of pharmacy when receiving submissions or when the Secretary determines that a pharmacy is acting contrary to FFDCA Section 503A. H.R. 3204 would require that the Comptroller General review pharmacy compounding in each state, review state laws and policies, assess available tools with which purchasers could determine the safety and quality of compounded drugs, evaluate the effectiveness of communication about compounding among states and between the states and FDA, and evaluate FDA's implementation of FFDCA Sections 503A [21 USC 353a] and 503B. The report would be due three years after the bill's enactment. A drug may change hands many times from the point at which it leaves the manufacturer until it reaches the dispenser who provides the drug to a patient. Each step along the way--involving the manufacturer, wholesale distributors, repackagers, third-party logistics providers, and dispensers--presents an opportunity for "contamination, diversion, counterfeiting, and other adulteration." Members of Congress, FDA, and industry groups within the supply chain, among others, have looked for a mutually agreeable system to trace and verify the identity of a drug as it travels through the chain. One goal was the development of a national policy that would be more feasible and effective than a patchwork of varying state requirements. Title II, the proposed Drug Supply Chain Security Act, would, among other things, require the creation and continuation of transaction information , transaction history , and transaction statements (beginning no later than January 2, 2015 for manufacturers, wholesale distributors, and repackagers; beginning July 1, 2015 for dispensers); a product identifier on each package and homogeneous case of a product, to include a standardized numerical identifier (SNI), lot number, and product expiration date (beginning no later than four years after enactment of this bill); required verification of the product identifier at the package level (with staggered starting dates: manufacturers four years after enactment of this bill, repackagers five years after enactment, wholesale distributors six years after enactment, and dispensers seven years after enactment); registration of wholesale distributors and third-party logistics providers in the states from which they distribute or by the Secretary if the state does not offer such licensure; that the Secretary develop standards for that registration; specific activities, following a specified timeline, to implement an interoperative unit-level traceability system ten years after enactment; and the development and maintenance of a uniform national policy for the tracing of drug products through the supply chain. To do so, Title II would amend the FFDCA by adding a subchapter titled Pharmaceutical Distribution Supply Chain that would contain proposed Sections 581 through 585, and by amending Sections 301 [21 USC 331] (prohibited acts), 303 [21 USC 333] (penalties), 502 [21 USC 352] (misbranding), and 503 [21 USC 353] (transaction statements upon wholesale distribution). Proposed FFDCA Section 582 would set out what would be requirements for specific types of entities/activities in the supply chain: manufacturers, wholesale distributors, dispensers, repackagers, and drop shipments. (Proposed Section 581 would provide definitions of the terms used. ) The next several paragraphs give an overview of those requirements. The Secretary would have to in consultation with federal officials and specified stakeholders and not later than one year after enactment, issue draft guidance to establish "standards for the interoperable exchange" of transaction information, transaction history, and transaction statements; establish processes by which supply chain entities could request waivers or exemptions to any requirements in the proposed Section 582 and by which the Secretary could determine specified exceptions; and finalize guidance not later than two years after enactment to specify whether and how to exempt products in the supply chain (before the effective date) from product identifier requirements. Other general provisions would provide several exemptions or alternative start dates for requirements relating to providing certain transaction information, transaction history, or transaction statements, or wholesale distributor and third-party logistics provider licensing, for products that were in the supply chain before January 1, 2015 or over the period until the effective dates of required regulations; allow an entity that changed a package label solely to add the product identifier (as would be required by this Act) to submit that change to the Secretary in its annual report; require, unless the Secretary allows otherwise through guidance, that product identifiers include applicable data in "a 2-dimensional data matrix barcode when affixed to, or imprinted upon, a package" and in "a linear or 2-dimensional data matrix barcode when affixed to, or imprinted upon, a homogeneous case"; and allow that verification of the product identifier occur using human- or machine-readable methods. The first five subsections of the proposed FFDCA Section 582 would set requirements for manufacturers, wholesale distributors, and repackagers. These requirements would generally concern product tracing, including responsibility when accepting or transferring a drug, transaction information for returns, and requests for information regarding suspect products; product identifiers, beginning with the requirement that manufacturers and repackagers affix a standardized graphic to each package and homogenous case; and verification of suspect product, including quarantine, validating the transaction history and transaction information, verifying product identifier, notification of trading partners and the Secretary, maintenance of an electronic database. Although the approach (regarding, for example, tracing, identifiers, and verification) is consistent across the various entities in the supply chain, the timing and some elements of those requirements vary. A second set of subsections in a proposed FFDCA Section 582 describes enhanced drug distribution security provisions, including the development and implementation of an interoperable system of electronic package-level tracing, establishment of national standards for wholesale distributors and third-party logistics providers, a uniform national policy rather than state-specific requirements for drug tracing, and requirements that the Secretary develop guidance documents, hold public meetings, and establish pilot projects. The bill would require that interoperable, electronic tracing of products at the package level go into effect 10 years after enactment (proposed FFDCA Sec. 582(g)). The process would involve transaction information and transaction statements being "exchanged in a secure, interoperable, electronic manner in accordance with the standards established under the guidance" document (described below). Transaction information would include the package-level product identifiers. The bill would require systems and processes, including the standardized numerical identifier, to verify package-level products (according to the proposed required guidance); to respond to requests by the Secretary for transaction information and transaction statements; to gather necessary information; to protect confidential commercial information and trade secrets; and to associate transaction information and transaction statements with a product to allow a saleable return. The proposed section would allow a dispenser to "enter a written agreement with a third party" to maintain required information and statements. The Secretary would be allowed to "provide alternative methods of requirements," such as compliance timelines or waivers, for small businesses or in the case of a dispenser's undue economic hardship. This section would require that the Secretary enter into a contract for a "technology and software assessment that looks at the feasibility of dispensers with 25 or fewer full-time employees conducting interoperable, electronic tracing of products at the package level." The contract, which would include consultation with small dispensers, would be required to begin no later than 18 months after final guidance (see below), with the assessment to be completed no later than 8 1/2 years after enactment. The bill specifies the content of the assessment and requirements for public comment both on the statement of work and on the final assessment as well as a public meeting. The section would direct the Secretary to follow specific procedures when promulgating regulations. These would provide "appropriate flexibility" relating to small businesses and undue economic hardship on dispensers; consider results of pilot projects, public meetings, public health benefits and costs of additional regulations, the required assessment (see above) of small business dispensers. This requirement would not, however, delay the effective date of interoperable unit-level tracking. The Secretary would be required to issue several guidance documents through procedures outlined in the bill. The topics of the guidance documents, along with the timetable the Secretary would be required to meet, are: Identification of a suspect and illegitimate product ; due not later than 180 days after enactment; Recommendations for unit level tracing ; due not later than 18 months after a required public meeting; and Updated guidance on standards for interoperable data exchange ; to be finalized not later than 18 months after required public meeting. The Secretary would be required to hold at least five public meetings "to enhance the safety and security of the pharmaceutical distribution supply chain." The first meeting would not be able to be held until one year after enactment; the bill specifies the topics to be addressed in the meetings. The Secretary would be required to establish at least one pilot project, in coordination with manufacturers, repackagers, wholesale distributors, and dispensers "to explore and evaluate methods to enhance the safety and security of the pharmaceutical distribution supply chain." The bill directs the design of such pilots. The bill directs that neither the public meeting nor the pilot project requirements delay the effective date of interoperable unit-level tracking. Beginning 10 years after enactment--at which time the national, interoperable, unit-level tracing system would go into effect, as would be required by this act--several requirements of the act would have "no force or effect." These include the exchange of transaction histories among supply chain entities that would be required by proposed FFDCA Section 582. The bill would amend FFDCA Section 503(e) [21 USC 353], which currently requires, among other things, that a wholesale distributor (who is not the manufacturer or an authorized distributor of record) be licensed by the state from which it distributes the drug, and that each manufacturer maintain a current list of authorized distributors of record for each drug. A proposed amendment to Section 503(e) would add that if that state does not require licensure, the Secretary may provide the licensure (and may collect a fee to reimburse the costs of the licensure program and related periodic inspections). The wholesale distributor would also have to be licensed by the receiving state if that state requires licensure. The licenses would be required to meet the conditions that would be established by a separate section of the act. Other proposed requirements include that the owner or operator of a wholesale distributor be required to report to the Secretary annually on each license held and contact information of all its facilities. The wholesale distributor must also report on significant federal or state disciplinary actions. The Secretary would be required to establish by January 1, 2015, and regularly update, a publicly available database of authorized wholesale distributors. The Secretary would provide for state officials to have prompt and secure access to the licensing information. This act would not authorize the Secretary to disclose protected trade secrets or confidential information. The bill would amend the definition of wholesale distribution to include additional exclusions; would specify that a third-party logistics provider (as would be defined in the act) would not have to be licensed as a wholesale distributor if the third-party logistics provider never assumed ownership of the product; and would define a business entity affiliate. H.R. 3204 would add a proposed FFDCA Section 583, National Standards for Prescription Drug Wholesale Distributors, which would include standards for storage and handling, records, bonds or other means of security, mandatory background checks and fingerprinting, qualifications for key personnel, prohibited persons, and mandatory physical facility inspection. If the Secretary promulgates regulations pursuant to this section, the Secretary must issue a notice of proposed rulemaking, allow for a comment period, and have the final regulation take effect two years after its publication. This act would add a proposed FFDCA Section 584, National Standards for Third-Party Logistics Providers, which would require that a third-party logistics provider be licensed by the state from which it distributes the drug, or if that state does not require licensure, by the Secretary (who may collect a fee to reimburse the Secretary for the costs of the licensure program and related periodic inspections). The third-party logistics provider would also have to be licensed by the receiving state if that state requires licensure and the third-party logistics provider is not licensed by the Secretary. The bill would require annual reports by each facility of a third-party logistics provider to include its licensure and contact information. The Secretary would be required to issue regulations, not later than two years after enactment, regarding standards for the licensing of third-party logistics providers, to cover third-party accreditation, storage practices (including space, security, written policies and procedures), periodic inspection, prohibited personnel, mandatory background checks, provision of lists (upon request by licensing authority) of all manufacturers, wholesale distributors, and dispensers for which the third-party logistics providers provides services, and license renewal. For regulations promulgated regarding third-party logistics provider licensing, the Secretary would be required to provide a notice of proposed rulemaking, allow for a comment period, and set an effective date one year after the final regulation is issued. H.R. 3204 would establish a proposed FFDCA Section 585 that would address the relationship of the proposed supply chain requirements to state authorities. Specifically, it would prohibit, from the date of enactment, a state or political subdivision of a state to establish or continue "any requirements for tracing products through the distribution system (including any requirements with respect to statements of distribution history, transaction history, transaction information, or transaction statement of a product as such product changes ownership in the supply chain, or verification, investigation, disposition, notification, or recordkeeping relating to such systems, including paper or electronic pedigree systems or for tracking and tracing drugs throughout the distribution system) which are inconsistent with, more stringent than, or in addition to, any requirements applicable under section 503(e) (as amended by such Act) or this subchapter (or regulations issued thereunder), or which are inconsistent with--'(1) any waiver, exception, or exemption pursuant to section 581 or 582; or '(2) any restrictions specified in section 582." Similarly, this section would prohibit, from the date of enactment, a state or political subdivision of state to establish or continue "any standards, requirements, or regulations with respect to wholesale prescription drug distributor or third-party logistics provider licensure that are inconsistent with, less stringent than, directly related to, or covered by the standards and requirements applicable under section 503(e) (as amended by such Act), in the case of a wholesale distributor, or section 584, in the case of a third-party logistics provider." It would also prohibit a state from regulating third-party logistics providers as wholesale distributors. It would allow a state to collect fees for carrying out wholesale distributor and third-party logistics provider licensure. The proposed section would allow states to take specified enforcement, license suspension and revocation, and regulation of licensed entities "in a manner that is consistent with product tracing requirements" under the proposed FFDCA Section 582. The proposed section would also note an exception: "Nothing in this section shall be construed to preempt State requirements related to the distribution of prescription drugs if such requirements are not related to product tracing as described in subsection (a) or wholesale distributor and third-party logistics provider licensure as described in subsection (b) applicable under section 503(e) (as amended by the Drug Supply Chain Security Act) or this subchapter (or regulations issued thereunder)." The bill would amend FFDCA Section 301(t) [21 USC 331] making it a prohibited act to fail to comply with requirements in proposed FFDCA Sections 582 and 584 (referring to transaction requirements of entities in the supply chain and national standards for third-party logistics providers). It would also amend FFDCA Section 502 [21 USC 352] to deem a drug as misbranded if it fails to have the product identifier that would be required by proposed FFDCA Section 582.

The proposed Drug Quality and Security Act, H.R. 3204, is the current focus of congressional efforts to protect the public from unsafe, ineffective, or otherwise subquality compounded drugs and from the risks of counterfeit and subquality drugs entering the supply chain between the manufacturer and the dispenser. Majority and minority leadership of the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions announced an agreement on September 25, 2013, following years of bicameral and bipartisan efforts. On September 27, 2013, Representative Fred Upton, the chair of the House committee, introduced the text, which would amend the Federal Food, Drug, and Cosmetic Act (FFDCA), as H.R. 3204. The House passed it by voice vote on September 28, 2013, sending it to the Senate on September 30, 2013. The bill now awaits Senate action. Title I, the Compounding Quality Act, would create the term outsourcing facility to apply to an entity that compounds sterile drugs in circumstances that go beyond activities that the FFDCA allows pharmacies to do under state regulation. As such, the proposed category could be conceptualized somewhere between a state-regulated pharmacy and a federally regulated drug manufacturer. The bill would direct the Secretary of Health and Human Services (HHS) to consult with the National Association of Boards of Pharmacy regarding submissions from states that concern a compounding pharmacy that may be acting outside what the FFDCA allows. The bill would also maintain the FFDCA section that addresses what is referred to as traditional compounding--wherein a pharmacist or physician compounds a drug to fill a prescription written for an individual patient. It would remove the provision, which has been challenged in court, that forbids a compounder from advertising or promoting a compounded drug. An entity that compounds sterile drugs and that may not obtain prescriptions for identified individual patients would be able to voluntarily register as an outsourcing facility. If it also complies with a set of listed requirements, an outsourcing facility would be exempt from certain FFDCA requirements on drug manufacturers: adequate directions for use labeling, sale only after FDA approval of a new drug application, and compliance with supply chain activities (that would be added by Title II of H.R. 3204). An outsourcing facility would have to label the product to include the statement "This is a compounded drug," list active and inactive ingredients, report annually to the HHS Secretary on drugs compounded, be subject to inspection, submit adverse event reports, and pay annual fees (that would be established by this bill) to cover the cost of overseeing outsourcing facilities. Title II, the Drug Supply Chain Security Act, would add FFDCA requirements to be implemented over the next few years. These include that manufacturers and repackagers put a product identifier, including a standardized numerical identifier, on each package or homogenous case. With certain exceptions, exchange of transaction information, histories, and statements would be required when a manufacturer, wholesale distributor, dispenser, or repackager transfers or accepts a drug. Also required would be a system of verification and notification when the Secretary or a trading partner within the supply chain suspects that a product may be illegitimate. The bill would require national standards for the licensing of wholesale distributors and third-party logistics providers. Requirements for the Secretary would include guidance documents, regulations, public meetings, and pilot projects. The act also would include a timetable and tasks involving the development of an interoperable, electronic, package-level tracking system to begin 10 years after enactment.

Two separate bills are advancing in the 111 th Congress that together could provide nearly $4 billion of supplemental funds for agricultural programs. Table 1 shows the agriculture-related provisions in these bills-- H.R. 4213 , commonly known as the "tax extenders" bill; and H.R. 4899 , a supplemental appropriations bill for war spending and disaster response. The tax extenders bill ( H.R. 4213 ) would provide comparatively large amounts totaling up to $3.6 billion for agriculture-related programs. Both the House and Senate have passed versions of the bill. Rather than resolving differences in a conference committee, the House and Senate are trading substitute amendments. The House-passed version from May 28, 2010, includes $1.48 billion for agricultural disaster assistance, $1.15 billion for a settlement of the Pigford lawsuit against the U.S. Department of Agriculture (USDA) for past racial discrimination, $868 million to extend biodiesel tax credits for one year, and $190 million to extend a conservation tax deduction for one year. The Senate-passed version from March 10, 2010, does not contain funding for the Pigford settlement, but does include the other provisions, which total $2.5 billion. The other measure, the war supplemental appropriations bill ( H.R. 4899 ), would provide smaller appropriations for other agricultural programs, as well as rescind prior appropriations from various agricultural accounts. The House and Senate are trading amendments to reconcile difference between each chamber's version of the bill. The most recent House-passed version, from July 1, 2010, contains $1.4 billion for agriculture before rescissions, including $1.15 billion for the Pigford settlement (duplicated from H.R. 4213 because of procedural uncertainty about whether Pigford will remain in the tax extenders bill), $150 million for P.L. 480 Food for Peace, $50 million for The Emergency Food Assistance Program (TEFAP), $32 million for the farm loan program to support an additional $950 million of loans, $18 million for emergency forest restoration, and additional authorities to raise fees for the Section 502 rural housing loan guarantee program. The Senate-passed version from May 27, 2010, contains $200 million for agriculture before rescissions, including identical provisions for the loan programs and forestry, but does not have the Pigford or TEFAP funding. Rescissions from agriculture programs are significant in the most recent House-passed version of H.R. 4899 , totaling $1.0 billion. The House bill would rescind $487 million from reserve funds for the Supplemental Nutrition Program for Women, Infants, and Children (WIC), $422 million from rural development (including $300 million of rural broadband funding from the American Recovery and Reinvestment Act), and $70 million from unobligated balances from the Natural Resources Conservation Service. Both the House and Senate bills would offset $50 million by limiting mandatory outlays for the Biomass Crop Assistance Program (BCAP). After rescissions, the net cost of the agriculture provisions is $371 million in the most recent House-passed version of H.R. 4899 , and $150 million in the Senate-passed version. Both bills await further floor action to resolve differences between the chambers. In December 2009, the original House-passed version of the "tax extenders" bill, H.R. 4213 , had two agricultural-related tax provisions: Biodiesel Tax Credits. Section 401 would extend until December 31, 2010, retroactively, the expiration date for three biodiesel tax credits (biodiesel tax credit, small agri-biodiesel producer credit, and renewable diesel tax credit). These credits expired on December 31, 2009. The Joint Tax Committee estimates that these extensions would cost $634 million in FY2010 and $235 million in FY2011. Conservation Tax Deduction. Section 131 of the original House-passed bill would extend until December 31, 2010, retroactively, the expiration date for contributions of capital gain real property made for a qualified conservation purpose. A previous extension in the 2008 farm bill expired on December 31, 2009. The Joint Tax Committee estimates that the provision will cost $23 million in FY2010, and $190 million over 10 years. The Senate-passed version from March 10, 2010 ( H.R. 4213 , a Senate amendment to the House bill), includes both of the tax provisions above, plus emergency agricultural disaster assistance. Agricultural Disaster Assistance . Section 245 of the Senate-passed version of H.R. 4213 would provide $1.48 billion of agricultural disaster assistance to be paid from the Commodity Credit Corporation (CCC). The assistance includes about $950 million in direct payments to producers of program crops for 2009 crop losses in counties designated as primary natural disaster areas. Unlike prior-year disaster assistance, payments would be available for losses as small as 5%. Payments also would be allowed for producers with losses for specialty crops (a $300 million grant program to states), cottonseed ($42 million), and aquaculture ($25 million), as well as for a Hawaiian sugarcane cooperative ($21 million). Poultry producers would be allowed no-interest emergency loans for losses due to contract terminations with poultry integrators (an unspecified amount of loans supported by $75 million of budget authority). Also, the bill provides an additional $50 million for grazing losses in 2009 by altering the payment criteria for livestock forage disaster payments. USDA would receive $10 million for administrative costs. The creation of "permanent" agricultural disaster programs (e.g., SURE, the Supplemental Revenue Assistance Payments Program) in the 2008 farm bill was meant to forestall the need for this type of ad hoc disaster assistance. Biodiesel Tax Credits. Section 102 of the Senate-passed version contains the same extension to December 31, 2010, as the House version above. Conservation Tax Deduction. Section 114 of the Senate-passed version contains the same extension to December 31, 2010, as the House version above. Instead of going to a conference committee, a subsequent House amendment to the Senate amendment was passed by the House on May 28, 2010, to address differences between the chambers. It contains essentially the same agricultural disaster assistance and both of the tax extensions, and adds money for a settlement of the Pigford discrimination case against USDA. Agricultural Disaster Assistance . Section 604 of the House-passed amendment provides effectively identical disaster relief language as in the Senate-passed version above. Pigford Settlement . Section 608 of the House-passed amendment provides $1.15 billion of discretionary funds for a final settlement of the Pigford lawsuit against USDA for past racial discrimination in the farm loan programs. This appropriation supplements $100 million of mandatory funds that were provided in the 2008 farm bill, and thus would provide a total of $1.25 billion. The 2008 farm bill permitted any claimant in the original Pigford decision from 1999 who had not previously obtained a determination to petition in civil court for a determination. On February 18, 2010, UDSA and the Department of Justice announced a $1.25 billion settlement of these so-called Pigford II claims. The Administration requested the funds shortly after the settlement in February, but the House amendment to H.R. 4213 posted on May 20 would be the first bill to provide funds. A March 31, 2010, deadline for Congress to appropriate $1.15 billion has passed, giving the plaintiffs a right to void the February settlement. But because the settlement is a priority for USDA and the White House, and efforts are proceeding for the appropriation, plaintiffs have not exercised their right to void the settlement. Biodiesel Tax Credits. Section 202 of the House-passed amendment contains the same extension to December 31, 2010, as the versions above. Conservation Tax Deduction. Section 224 of the House-passed amendment contains the same extension to December 31, 2010, as the versions above. During Senate consideration of amendments to the House version during June, there was difficulty reaching agreement over the budget impact of the bill, and a desire for more offsets rather than emergency spending. This began to jeopardize the prospects that the ancillary provisions such as the agricultural disaster and Pigford funding would remain in the bill. The original House-passed version of H.R. 4899 from March 24, 2010--the other vehicle carrying supplemental appropriations for agriculture--did not provide any supplemental funding for agriculture. But it did contain two rescissions from agricultural accounts that would have provided $465 million of offsets for other programs in the bill. Women, Infants and Children (WIC). The March 24, 2010, House-passed bill would have rescinded $361.8 million of unobligated funds that were placed in reserve for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ). The ARRA provided $500 million to WIC, "of which $400,000,000 [were] placed in reserve to be allocated as the Secretary deems necessary, ... to support participation should cost or participation exceed budget estimates." Rural Development Programs. The March 24, 2010, House-passed bill would have rescinded $102.7 million in budget authority from prior-year rural development appropriations (other than through ARRA) that were designated as emergency. Besides ARRA, the only emergency appropriations in rural development have been for the "water and waste water" facilities account. These were provided to help rural communities rebuild or restore their water infrastructure after natural disasters such as hurricanes, droughts, and floods. The rescission would sweep unobligated disaster funds from several different prior-year emergency appropriations. The Senate passed its version of H.R. 4899 , the Supplemental Appropriations Act, 2010, on May 27, 2010. This bill included $200 million of gross new budget authority and other provisions for several USDA programs. After offsets, the cost of the agricultural programs would be $150 million for the following programs. P.L. 480 "Food for Peace" Title II grants. USDA's Foreign Agricultural Service would receive an additional $150 million (to supplement the FY2010 base of $1.69 billion) for Food for Peace (P.L. 480) Title II humanitarian food aid grants. The supplemental responds to the January 2010 earthquake in Haiti. Report language ( S.Rept. 111-188 ) also encourages USDA to use existing funds in the Bill Emerson Humanitarian Trust if future food deliveries are complicated by transportation or other logistical difficulties. Farm Loan Program . USDA has been facing higher loan demand during the financial crisis because commercial lenders have constrained their own lending practices. Some USDA farm loan offices in the states have begun to deplete their FY2010 allocation to make loans. Nationally, some loan programs have used 80%-90% of the their fiscal year allocation in seven months. The Senate-passed version of the supplemental would allow USDA's Farm Service Agency to issue an additional $950 million in loans and guarantees (on top of a nearly exhausted FY2010 base of $5.1 billion). This additional loan authority would cost $32 million in budget authority ($31 million for loan subsidy plus $1 million for administrative expenses, on the FY2010 loan subsidy base of $141 million). Table 2 shows the specific amounts that would be provided to the various direct and guaranteed farm loan programs. Emergency Forest Restoration Program. USDA's Farm Service Agency would receive $18 million for a cost-share program to restore nonindustrial private forest land that is damaged by a natural disaster occurring after January 1, 2010. The Senate provision provides expedited rulemaking procedures to facilitate implementation of this 2008 farm bill program, which has yet to begin or receive any appropriation. Rural Development . USDA's Rural Housing Service would receive authority for an additional $697 million in loan guarantee authority (on the FY2010 base of $12 billion of loan guarantees) for the Section 502 Single-Family Housing Guaranteed Loan program. The cost of providing these additional guarantees would be offset by raising the guarantee fees charged to commercial banks for guarantees they receive on Section 502 loans to homeowners (from 1% to 3.5% of the principal of new loans being guaranteed). The increase in fees is permanent; the increase in loan authority is temporary. Therefore, this guaranteed loan program would be able to operate in the future with less subsidy. Demand for single-family housing loan guarantees was heavy in FY2009 during the financial crisis. By April of FY2010, heavy demand had depleted the large increase in guarantee authority over FY2009 levels (from $6.2 billion in FY2009 to $12 billion in the regular FY2010 appropriation). Biomass Crop Assistance Program (BCAP) . In current law, the BCAP is authorized to receive "such sums as necessary" of mandatory funds from the CCC. The 2008 farm bill created BCAP to encourage the production of cellulosic feedstocks for advanced biofuels. Incentives are available for harvest and post-production storage and transportation. In its March 2010 baseline, CBO projects that BCAP will need $602 million of budget authority in FY2010 and $432 million in FY2011. The Senate-passed supplemental appropriation would create a "change in mandatory program spending" (CHIMP) by allowing no more than $552 million in FY2010 and $432 million in FY2011. The difference between the CBO baseline estimates and the limits placed in the supplemental would create an estimated savings of $50 million in FY2010 and no change in FY2011 (assuming the supplemental is enacted before the final rule to implement the program is adopted and participants enroll). Food and Nutrition Service . The Senate report language accompanying the bill ( S.Rept. 111-188 ) directs USDA's Food and Nutrition Service (FNS) to review whether there is any need to reprogram funds within FNS for use through The Emergency Food Assistance Program (TEFAP) because of heavy demand on food banks and commodity assistance programs. No additional budget authority is provided to implement this recommendation. To resolve differences with the Senate version, the House subsequently passed amendments to the Senate version on July 1, 2010. H.Res. 1500 adopted all of the provisions in the Senate-passed version described above and made additional supplemental appropriations and rescissions. The additions to the Senate version in this most recent House-passed version include: Pigford Settlement. The House version from July 1, 2010, adds $1.15 billion for the Pigford settlement. This is duplicated from H.R. 4213 because of procedural uncertainty about whether Pigford will remain in the tax extenders bill. Emergency Food Assistance. The House version adds $50 million for The Emergency Food Assistance Program (TEFAP) to purchase food for distribution through local food networks. Rescissions. In addition to the $50 million offset from BCAP in the Senate-passed version above, the most recent House-passed version contains $979 million of other rescissions from agriculture accounts. Supplemental Nutrition Program for Women, Infants, and Children (WIC) . The House version would rescind $487 million from reserve funds for WIC, including $362 million from the American Recovery and Reinvestment Act (ARRA) and $125 million of other reserve funds. The first of these two WIC rescissions was in the original House bill; the second is new to the July version of the bill. Rural Development Programs . The most recent House version would rescind a total of $422 million from rural development. This includes $300 million of rural broadband funding from the ARRA (out of $2.5 billion appropriated for rural broadband in ARRA), and $122 million in budget authority from prior-year rural development appropriations (other than through ARRA) that were designated as emergency. As discussed for the original House version, these latter rescissions are for water and wastewater facilities accounts appropriated for prior natural disasters. Natural Resources Conservation Service. The House bill would rescind $70 million from unobligated prior-year balances from the Natural Resources Conservation Service.

Two separate bills are advancing in the 111th Congress that could provide nearly $4 billion of supplemental funds for agricultural programs in FY2010. The agricultural provisions in these bills have a relatively small funding impact compared with the nonagricultural provisions in the bills. H.R. 4213 (commonly known as the "tax extenders" bill) would provide up to $3.6 billion for agriculture-related programs. The House and Senate are trading amendments to reconcile differences between each chamber's version of the bill. The most recent House-passed version from May 28, 2010, includes $1.48 billion for agricultural disaster assistance, $1.15 billion for a settlement of the Pigford lawsuit against the U.S. Department of Agriculture (USDA), and $1.06 billion to extend tax provisions for biodiesel and conservation. The Senate-passed version from March 10, 2010, does not contain funding for the Pigford settlement, but does include the other provisions. Difficulty reaching agreement over the budget impact of the bill, and the need for offsets rather than emergency spending, may be jeopardizing the prospects that some of the agriculture provisions will remain in the bill. H.R. 4899 (a supplemental appropriations bill for war spending and disaster response) would provide relatively smaller appropriations for other agricultural programs, as well as rescind prior appropriations from various agricultural accounts. The House and Senate are trading amendments to reconcile difference between each chamber's version of the bill. The most recent House-passed version from July 1, 2010, contains $1.4 billion for agriculture before rescissions, including $1.15 billion for the Pigford settlement (duplicated from H.R. 4213 because of procedural uncertainty), $150 million for international food aid (P.L. 480 Food for Peace), $50 million for food purchases in a domestic nutrition assistance program (The Emergency Food Assistance Program, TEFAP), $32 million for the farm loan program (to support an additional $950 million of loans), $18 million for emergency forest restoration, and additional authorities to raise fees for the Section 502 rural housing loan guarantee program. The Senate-passed version from May 27, 2010, contains $200 million for agriculture before rescissions, including identical provisions for the loan programs and forestry, but does not have the Pigford or TEFAP funding. Rescissions from agriculture programs are significant in the most recent House-passed version of H.R. 4899, totaling $1.0 billion, and are much larger than in the Senate-passed bill. The House bill from July 1 would rescind $487 million from reserve funds for the Supplemental Nutrition Program for Women, Infants, and Children (WIC), $422 million from rural development (including $300 million of rural broadband funding), and $70 million from unobligated balances from the Natural Resources Conservation Service. Both the House and Senate bills would offset $50 million by limiting mandatory outlays for the Biomass Crop Assistance Program (BCAP). Both H.R. 4213 and H.R. 4899 await further floor action to resolve differences between the chambers.

The Foreign Intelligence Surveillance Act (FISA) provides a statutory framework by which government agencies may, when gathering foreign intelligence for an investigation, obtain authorization to conduct electronic surveillance or physical searches, utilize pen registers and trap and trace devices, or access specified business records and other tangible things. Authorization for such activities is typically obtained via a court order from the Foreign Intelligence Surveillance Court (FISC), a specialized court created to act as a neutral judicial decisionmaker in the context of FISA. Shortly after the 9/11 terrorist attacks, Congress enacted the USA PATRIOT Act, in part, to "provid[e] enhanced investigative tools" to "assist in the prevention of future terrorist activities and the preliminary acts and crimes which further such activities." That act and subsequent measures amended FISA to enable the government to obtain information in a greater number of circumstances. At the time of enactment, these expanded authorities prompted concerns regarding the appropriate balance between national security interests and civil liberties. Perhaps in response to such concerns, Congress established sunset provisions which apply to three of the most controversial amendments to FISA: Section 6001(a) of the Intelligence Reform and Terrorism Prevention Act (IRTPA), also known as the "lone wolf" provision, which simplifies the evidentiary showing needed to obtain a FISA court order to target non-U.S. persons who engage in international terrorism or activities in preparation therefor, specifically by authorizing such orders in the absence of a proven link between a targeted individual and a foreign power; Section 206 of the USA PATRIOT Act, which permits multipoint, or "roving," wiretaps (i.e., wiretaps which may follow a target even when he or she changes phones) by adding flexibility to the manner in which the subject of a FISA court order is specified; and Section 215 of the USA PATRIOT Act, which authorizes orders compelling a person to produce "any tangible thing" that is "relevant" to an authorized foreign intelligence, international terrorism, or counter-espionage investigation. These provisions were originally set to expire on December 31, 2005, but were extended multiple times, with slight modifications, through June 1, 2015. In summer 2013, media began reporting on several foreign intelligence activities conducted by the National Security Agency (NSA), including the bulk collection of telephone metadata under Section 215. The controversy surrounding Section 215 complicated efforts to reauthorize all three of the expiring provisions, and they eventually expired on June 1, 2015. One day later, Congress enacted the USA FREEDOM Act, which placed new limitations on the scope of the government's foreign intelligence activities, while simultaneously extending the expired provisions through December 15, 2019. FISA, enacted in 1978, provides a statutory framework which governs governmental authority to conduct, as part of an investigation to gather foreign intelligence information, electronic surveillance and other activities to which the Fourth Amendment warrant requirement would apply if they were conducted as part of a domestic criminal investigation. Its statutory requirements arguably provide a minimum standard that must be met before foreign intelligence searches or surveillance may be conducted by the government. The three amendments to FISA covered by this report are the "lone wolf," "roving wiretap," and Section 215 provisions. Although the amendments are often discussed as a group and may implicate similar questions regarding what legal standards govern the FISC's determinations, unique historical and legal issues apply to each amendment. As a result of the leaks by Edward Snowden, Section 215 has come to be the most controversial provision in recent years, as well as the provision with the most extensive legislative and litigation history. Section 215 of the USA PATRIOT Act broadened federal officials' access to materials in investigations to obtain foreign intelligence information not concerning a United States person or to protect against international terrorism or clandestine intelligence activities. It both enlarged the scope of materials that may be sought and lowered the standard for a court to issue an order compelling their production. Prior to the USA PATRIOT Act, FISA authorized the production of only four types of business records in foreign intelligence or international terrorism investigations. These were records from common carriers, public accommodation facilities, storage facilities, and vehicle rental facilities. The USA PATRIOT Act expanded the scope of records to authorize the production of "any tangible things." The scope of documents potentially covered by Section 215 was not changed by the USA FREEDOM Act. Section 215 of the USA PATRIOT Act also modified the evidentiary standard the FISC would apply before issuing an order compelling the production of documents. Prior to enactment of Section 215, an applicant had to have "specific and articulable facts giving reason to believe that the person to whom the records pertain is a foreign power or an agent of a foreign power." In contrast, under Section 215 as originally enacted, the applicant only needed to "specify that the records concerned [were] sought for a [foreign intelligence, international terrorism, or espionage investigation.]" In 2005, Congress further amended FISA procedures for obtaining business records. The applicable standard was changed to require "a statement of facts showing that there are reasonable grounds to believe that the tangible things sought are relevant to a [foreign intelligence, international terrorism, or espionage investigation.]" Under this standard, records are presumptively relevant if they pertain to: a foreign power or an agent of a foreign power; the activities of a suspected agent of a foreign power who is the subject of such authorized investigation; or an individual in contact with, or known to, a suspected agent of a foreign power who is the subject of such authorized investigation. Beginning in 2006, the government began to use orders of the FISC issued pursuant to Section 215 to collect large amounts of domestic telephone metadata in bulk with the goal of helping to detect and identify individuals who were part of terrorist networks. This program is frequently described as collecting telephone metadata "in bulk" to distinguish it from the narrower collection of metadata pertaining to an identified individual or group of individuals that is commonplace in both law enforcement and national security investigations. Following the public disclosure of these bulk intelligence activities, Section 215 was amended by the USA FREEDOM Act to additionally require the use of a "specific selection term" (SST) to "limit collection to the greatest extent reasonably practicable." An SST was defined as "a term that specifically identifies a person, account, address, or personal device, or any other specific identifier." These amendments also expressly prohibited orders under Section 215 that are limited only by broad geographic terms (such as a state or zip code) or named communications service providers (such as Verizon or AT&T). A slightly relaxed standard can be used under the amended Section 215 to obtain telephone metadata on an ongoing basis, but only for international terrorism investigations. Whereas a standard order under Section 215 would produce only those records that are responsive to an approved SST, an order seeking telephone records for an international terrorism investigation can also be used to produce a second set of telephone records that are not themselves responsive to an approved SST, but that are connected to one of the records that was directly produced by an SST. For example, if Alice called Bob, and Bob also called Charles, then a single Section 215 order that used Alice's phone number as an SST could obtain records of the call to Bob as well as records of the call from Bob to Charles. In order to take advantage of this increased scope of production, the government would need to demonstrate to the FISC that there was a "reasonable articulable suspicion" that the SST is associated with a foreign power, or an agent of a foreign power, who was engaged in international terrorism. Orders issued under Section 215, as amended, are accompanied by nondisclosure orders prohibiting the recipients from disclosing that the FBI has sought or obtained any tangible things pursuant to a FISA order. However, the recipient may discuss the order with other persons as necessary to comply with the order, with an attorney to obtain legal advice or assistance, or with other persons as permitted by the FBI. The recipient must identify persons to whom disclosure has been made, or is intended to be made, if the FBI requests, except that attorneys with whom the recipient has consulted do not need to be identified. The USA PATRIOT Improvement and Reauthorization Act of 2005 provided procedures by which a recipient of a Section 215 order may challenge orders compelling the production of business records. Once a petition for review is submitted by a recipient, a FISC judge must determine whether the petition is frivolous within 72 hours. If the petition is frivolous, it must be denied and the order affirmed. The order may be modified or set aside if it does not meet the requirements of FISA or is otherwise unlawful. Appeals by either party may be heard by the Foreign Intelligence Court of Review and the Supreme Court. Judicial review of nondisclosure orders operates under a similar procedure, but such orders are not reviewable for one year after they are initially issued. If the petition is not determined to be frivolous, a nondisclosure order may be set aside if there is no reason to believe that disclosure may endanger the national security of the United States, interfere with a criminal, counterterrorism, or counterintelligence investigation, interfere with diplomatic relations, or endanger the life or physical safety of any person. A petition to set aside a nondisclosure order may be defeated if the government certifies that disclosure would endanger the national security or interfere with diplomatic relations. Absent any finding of bad faith, such a certification is to be treated as conclusive by the FISC. If a petition is denied, either due to a certification described above, frivolity, or otherwise, the petitioner may not challenge the nondisclosure order for another year. Appeals by either party may be heard by the Foreign Intelligence Court of Review and the Supreme Court. Commonly referred to as the "lone wolf" provision, Section 6001(a) of IRTPA simplifies the evidentiary standard used to determine whether an individual, other than a citizen or a permanent resident of the United States, who engages in international terrorism, may be the target of a FISA court order. It does not modify other standards used to determine the secondary question of whether the electronic surveillance or a physical search of the subject of a court order is justified in a specific situation. The historical impetus for the "lone wolf" provision involved Zacarias Moussaoui, one of the individuals believed to be responsible for the 9/11 terrorist attacks. During the examination of the events leading up to the attacks, it was reported that investigations regarding Moussaoui's involvement were hampered by limitations in FISA authorities. Specifically, FBI agents investigating Moussaoui suspected that he had planned a terrorist attack involving piloting commercial airliners, and had detained him in August 2001 on an immigration charge. The FBI agents then sought a court order under FISA to examine the contents of Moussaoui's laptop computer. However, the agency apparently concluded that it had insufficient information at that time to demonstrate that Moussaoui was an agent of a foreign power as then required by FISA. Prior to its amendment, FISA authorized the FISC to approve, among other things, physical searches of a laptop only if probable cause existed to believe the laptop was owned or used by a foreign power or its agent. The definition of a "foreign power" included "groups engaged in international terrorism or activities in preparation therefor." Individuals involved in international terrorism for or on behalf of those groups were considered "agents of a foreign power." In the weeks leading up to the attacks, it appears that the FBI encountered an actual or perceived insufficiency of information demonstrating probable cause to believe that Moussaoui was acting for or on behalf of an identifiable group engaged in international terrorism. Following these revelations, a number of legislative proposals were put forth to amend the definition of "agents of a foreign power" under FISA so that individuals engaged in international terrorism need not be linked to a specific foreign power. One such amendment was ultimately enacted with passage of the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA). Section 6001 of the legislation, known as the "lone wolf" provision, provides that persons, other than citizens or permanent residents of the United States, who are engaged in international terrorism are presumptively considered to be agents of a foreign power. The provision obviates any need to provide an evidentiary connection between an individual and a foreign government or terrorist group. Critics of the "lone wolf" provision argued that the laptop in the Moussaoui case could have been lawfully searched under FISA or the laws governing generic criminal warrants. Critics also expressed concern that the simplified "lone wolf" standard would lead to "FISA serving as a substitute for some of our most important criminal laws." Proponents of the provision noted that the increased self-organization among terror networks has made proving connections to identifiable groups more difficult. Thus, a "lone wolf" provision is necessary to combat terrorists who use a modern organizational structure or who are self-radicalized. Section 206 of the USA PATRIOT Act amended FISA to permit multipoint, or "roving," wiretaps by adding flexibility to the degree of specificity with which the location or facility subject to electronic surveillance under FISA must be identified. It is often colloquially described as allowing FISA wiretaps to target persons rather than places. Prior to enactment of Section 206, the scope of electronic surveillance authorized by a court order was limited in two ways. First, the location or facility that was the subject of surveillance had to be identified. Second, only identifiable third parties could be directed by the government to facilitate electronic surveillance. Conducting electronic surveillance frequently requires the assistance of telecommunications providers, landlords, or other third parties. Furthermore, telecommunications providers are generally prohibited from assisting in electronic surveillance for foreign intelligence purposes, except as authorized by FISA. In cases where the location or facility was unknown, the identity of the person needed to assist the government could not be specified in the order. Therefore, limiting the class of persons that could be directed to assist the government by a FISA court order effectively limited the reach to known and identifiable locations. Section 206 of the USA PATRIOT Act amended Section 105(c)(2)(B) of FISA. It authorizes FISA orders to direct "other persons" to assist with electronic surveillance if "the Court finds, based on specific facts provided in the application, that the actions of the target ... may have the effect of thwarting the identification of a specified person." In a technical amendment later that year, the requirement that the order specify the location of the surveillance was also changed so that this requirement only applies if the facilities or places are known. These modifications have the effect of permitting FISA orders to direct unspecified individuals to assist the government in performing electronic surveillance, thus permitting court orders to authorize surveillance of places or locations that are unknown at the time the order is issued. This section was further amended by the USA PATRIOT Improvement and Reauthorization Act of 2005 to require that the FISC be notified within 10 days after "surveillance begins to be directed at any new facility or place." In addition, the FISC must be told the nature and location of each new facility or place, the facts and circumstances relied upon to justify the new surveillance, a statement of any proposed minimization procedures (i.e., rules to limit the government's acquisition and dissemination of information involving United States citizens) that differ from those contained in the original application or order, and the total number of facilities or places subject to surveillance under the authority of the present order. The Fourth Amendment imposes specific requirements upon the issuance of warrants authorizing searches of "persons, houses, papers, and effects." One of the requirements, referred to as the particularity requirement, states that warrants shall "particularly describ[e] the place to be searched." Under FISA, roving wiretaps are not required to identify the location that may be subject to surveillance. Therefore, some may argue that roving wiretaps do not comport with the particularity requirement of the Fourth Amendment. It is not clear that the Fourth Amendment would require that searches for foreign intelligence information be supported by a warrant, but prior legal challenges to similar provisions of Title III of the Omnibus Crime Control and Safe Streets Act may be instructive in the event that challenges to Section 206 are brought alleging violations of the particularity requirement of the Fourth Amendment. Similar roving wiretaps have been permitted under Title III since 1986 in cases where the target of the surveillance takes actions to thwart such surveillance. The procedures under Title III are similar to those currently used under FISA, but two significant differences exist. First, a roving wiretap under Title III must definitively identify the target of the surveillance. Fixed wiretaps under Title III and all wiretaps under FISA need only identify the target if the target's identity is known. FISA permits roving wiretaps via court orders that only provide a specific description of the target. Second, Title III requires that the surveilled individuals be notified of the surveillance, generally 90 days after surveillance terminates. FISA contains no similar notification provision. In United States v. Petti , the U.S. Court of Appeals for the Ninth Circuit was presented with a challenge to a roving wiretap under Title III alleging that roving wiretaps do not satisfy the particularity requirement of the Fourth Amendment. The court initially noted that the test for determining the sufficiency of the warrant description is whether the place to be searched is described with sufficient particularity to enable the executing officer to locate and identify the premises with reasonable effort, and whether there is any reasonable probability that another premise might be mistakenly searched. Applying this test, the Ninth Circuit held that roving wiretaps under Title III satisfied the particularity clause of the Fourth Amendment. The court in this case relied upon the fact that targets of roving wiretaps had to be identified and that they were only available where the target's actions indicated an intent to thwart electronic surveillance. Critics of roving wiretaps under FISA may argue that Section 206 increases the likelihood that innocent conversations will be the subject of electronic surveillance. They may further argue that the threat of these accidental searches of innocent persons is precisely the type of injury sought to be prevented by the particularity clause of the Fourth Amendment. Such a threat may be particularly acute in this case given the fact that there is no requirement under FISA that the target of a roving wiretap be identified, although the target must be specifically described. As noted above, these three FISA amendments have been extended until December 15, 2019. If that date were to arrive without any extension, the amended FISA authorities would revert to their text as it appeared before the enactment of the USA PATRIOT Act. For example, in the context of roving wiretaps, Section 105(c)(2) of FISA would read as it did on October 25, 2001, eliminating the authority for FISA court orders to direct other unspecified persons to assist with electronic surveillance. Likewise, regarding FISA orders for the production of documents, Sections 501 and 502 of FISA would read as they did on October 25, 2001, restricting the types of business records that are subject to FISA and reinstating the requirement for "specific and articulable facts giving reason to believe that the person to whom the records pertain is a foreign power or an agent of a foreign power." However, a grandfather clause applies to each of the three provisions. The grandfather clauses authorize the continued effect of the amendments with respect to investigations that began, or potential offenses that took place, before the provisions' sunset date. Thus, for example, if a non-U.S. person were engaged in international terrorism before the sunset date, he would still be considered a "lone wolf" for FISA court orders sought after the provision has expired. Similarly, if an individual is engaged in international terrorism before that date, he may be the target of a roving wiretap under FISA even if authority for new roving wiretaps expired.

Two amendments to the Foreign Intelligence Surveillance Act (FISA) were enacted as part of the USA PATRIOT Act. Section 206 of the USA PATRIOT Act amended FISA to permit multipoint, or "roving," wiretaps by adding flexibility to the degree of specificity with which the location or facility subject to electronic surveillance under FISA must be identified. Section 215 enlarged the scope of materials that could be sought under FISA to include "any tangible thing." It also lowered the standard required before a court order may be issued to compel their production. A third amendment to FISA was enacted in 2004, as part of the Intelligence Reform and Terrorism Prevention Act (IRTPA). Section 6001(a) of the IRTPA changed the rules regarding the types of individuals who may be targets of FISA-authorized searches. Also known as the "lone wolf" provision, it permits surveillance of non-U.S. persons engaged in international terrorism without requiring evidence linking those persons to an identifiable foreign power or terrorist organization. In summer 2013, media began reporting on several foreign intelligence activities conducted by the National Security Agency (NSA), including the bulk collection of telephone metadata under Section 215 of the USA PATRIOT Act. After a one-day lapse in the expiring authorities, Congress enacted the USA FREEDOM Act, which placed new limitations on the scope of the government's foreign intelligence activities, while simultaneously extending the expired provisions through December 15, 2019. Although these provisions are set to sunset at the end of 2019, grandfather clauses permit them to remain effective with respect to investigations that began, or potential offenses that took place, before the sunset date.

The Bipartisan Campaign Reform Act of 2002 (BCRA), P.L. 107-155 ( H.R. 2356 , 107 th Congress) significantly amended federal campaign finance law. Shortly after President Bush signed BCRA into law, Senator Mitch McConnell filed suit in U.S. District Court for the District of Columbia against the Federal Election Commission (FEC) and the Federal Communications Commission (FCC) arguing that portions of BCRA violate the First Amendment and the equal protection component of the Due Process Clause of the Fifth Amendment to the Constitution. Likewise, the National Rifle Association (NRA) filed suit against the FEC and the Attorney General arguing that the law deprives it of freedom of speech and association, of the right to petition the government for redress of grievances, and of the rights to equal protection and due process, in violation of the First and Fifth Amendments to the Constitution. Ultimately, eleven suits challenging the law were brought by more than 80 plaintiffs and were consolidated into one lead case, McConnell v. FEC. On May 2, 2003, the U.S. District Court for the District of Columbia issued its decision in McConnell v. FEC, striking down many significant provisions of the law. The three-judge panel, which was split 2 to 1 on many issues, ordered that its ruling take effect immediately. After the court issued its opinion, several appeals were filed and on May 19 the U.S. district court issued a stay to its ruling, leaving BCRA, as enacted, in effect until the Supreme Court ruled. Under the BCRA expedited review provision, the court's decision was directly reviewed by the U.S. Supreme Court. On September 8 the Supreme Court returned to the bench a month before its term officially began to hear four hours of oral argument in the case, and issued its decision in December. In its most comprehensive campaign finance decision since its 1976 decision in Buckley v. Valeo, the U.S. Supreme Court in McConnell v. FEC upheld against facial constitutional challenges key portions of BCRA. The most significant portion of the Court's decision is the 119 page majority opinion coauthored by Justices Stevens and O'Connor, joined by Justices Souter, Ginsburg, and Breyer, in which the Court upheld two critical features of BCRA: the limits on raising and spending previously unregulated political party soft money, and the prohibition on corporations and labor unions using treasury funds--which is unregulated soft money--to finance electioneering communications. Instead, BCRA requires that such ads may only be paid for with corporate and labor union political action committee (PAC) funds, also known as hard money. In general, the term "hard money" refers to funds that are raised and spent according to the contribution limits, source prohibitions, and disclosure requirements of the Federal Election Campaign Act (FECA), while the term "soft money" is used to describe funds raised and spent outside the federal election regulatory framework, but which may have at least an indirect impact on federal elections. In upholding BCRA's "two principal, complementary features," the McConnell Court readily acknowledged that it was under "no illusion that BCRA will be the last congressional statement on the matter" of money in politics. "Money, like water, will always find an outlet," the Court predicted, and therefore, campaign finance issues that will inevitably arise, and corresponding legislative responses from Congress, "are concerns for another day." Indeed, in 2007, the Court in FEC v. Wisconsin Right to Life, Inc. (WRTL II) determined that BCRA's "electioneering communications" provision was unconstitutional as applied to ads that Wisconsin Right to Life, Inc., sought to run, thereby limiting the law's application. Title I of BCRA prohibits national party committees and their agents from soliciting, receiving, directing, or spending any soft money. As the Court noted, Title I takes the national parties "out of the soft-money business." In addition, Title I prohibits state and local party committees from using soft money for activities that affect federal elections; prohibits parties from soliciting for and donating funds to tax-exempt organizations that spend money in connection with federal elections; prohibits federal candidates and officeholders from receiving, spending, or soliciting soft money in connection with federal elections and restricts their ability to do so in connection with state and local elections; and prevents circumvention of the restrictions on national, state, and local party committees by prohibiting state and local candidates from raising and spending soft money to fund advertisements and other public communications that promote or attack federal candidates. Plaintiffs challenged Title I based on the First Amendment as well as Art. I, SS 4 of the U.S. Constitution, principles of federalism, and the equal protection component of the Due Process Clause of the 14 th Amendment. The Court upheld the constitutionality of all provisions in Title I, finding that its provisions satisfy the First Amendment test applicable to limits on campaign contributions: they are "closely drawn" to effect the "sufficiently important interest" of preventing corruption and the appearance of corruption. Rejecting plaintiff's contention that the BCRA restrictions on campaign contributions must be subject to strict scrutiny in evaluating the constitutionality of Title I, the Court applied the less rigorous standard of review--"closely drawn" scrutiny. Citing its landmark 1976 decision, Buckley v. Valeo, and its progeny, the Court noted that it has long subjected restrictions on campaign expenditures to closer scrutiny than limits on contributions in view of the comparatively "marginal restriction upon the contributor's ability to engage in free communication" that contribution limits entail. The Court observed that its treatment of contribution limits is also warranted by the important interests that underlie such restrictions, i.e. preventing both actual corruption threatened by large dollar contributions as well as the erosion of public confidence in the electoral process resulting from the appearance of corruption. Determining that the lesser standard shows "proper deference to Congress' ability to weigh competing constitutional interests in an area in which it enjoys particular expertise," the Court noted that during its lengthy consideration of BCRA, Congress properly relied on its authority to regulate in this area, and hence, considerations of stare decisis as well as respect for the legislative branch of government provided additional "powerful reasons" for adhering to the treatment of contribution limits that the Court has consistently followed since 1976. Responding to plaintiffs' argument that many of the provisions in Title I restrict not only contributions but also the spending and solicitation of funds that were raised outside of FECA's contribution limits, the Court determined that it is "irrelevant" that Congress chose to regulate contributions "on the demand rather than the supply side." Instead, the relevant inquiry is whether its mechanism to implement a contribution limit or to prevent circumvention of that limit burdens speech in a way that a direct restriction on a contribution would not. The Court concluded that Title I only burdens speech to the extent of a contribution limit: it merely limits the source and individual amount of donations. Simply because Title I accomplishes its goals by prohibiting the spending of soft money does not render it tantamount to an expenditure limitation. Unpersuaded by a dissenting Justice's position that Congress' regulatory interest is limited to only the prevention of actual or apparent quid pro quo corruption "inherent in" contributions made to a candidate, the Court found that such a "crabbed view of corruption" and specifically the appearance of corruption "ignores precedent, common sense, and the realities of political fundraising exposed by the record in this litigation." According to the Court, equally problematic as classic quid pro quo corruption, is the danger that officeholders running for re-election will make legislative decisions in accordance with the wishes of large financial contributors, instead of deciding issues based on the merits or constituent interests. As such corruption is neither easily detected nor practical to criminalize, the Court reasoned, Title I offers the best means of prevention, i.e., identifying and eliminating the temptation. Title II of BCRA created a new term in FECA, "electioneering communication," which is defined as any broadcast, cable or satellite communication that "refers" to a clearly identified federal candidate, is made within 60 days of a general election or 30 days of a primary, and if it is a House or Senate election, is targeted to the relevant electorate. Title II prohibits corporations and labor unions from using their general treasury funds (and any persons using funds donated by a corporation or labor union) to finance electioneering communications. Instead, the statute requires that such ads may only be paid for with corporate and labor union political action committee (PAC) regulated hard money. The Court upheld the constitutionality of this provision. In Buckley v. Valeo, the Court construed FECA's disclosure and reporting requirements, as well as its expenditure limitations, to apply only to funds used for communications that contain express advocacy of the election or defeat of a clearly identified candidate. Numerous lower courts have since interpreted Buckley to stand for the proposition that communications must contain express terms of advocacy, such as "vote for" or "vote against," in order for regulation of such communications to pass constitutional muster under the First Amendment. Absent express advocacy, according to most lower courts, a communication is considered issue advocacy, which is protected by the First Amendment and therefore, may not be regulated. Effectively overturning such lower court rulings, the McConnell Court held that neither the First Amendment nor Buckley prohibits BCRA's regulation of "electioneering communications," even though electioneering communications, by definition, do not necessarily contain express advocacy. When the Buckley Court distinguished between express and issue advocacy, the McConnell Court found, it did so as a matter of statutory interpretation, not constitutional command. Moreover, the Court announced that by narrowly reading the FECA provisions in Buckley to avoid problems of vagueness and overbreadth, it "did not suggest that a statute that was neither vague nor overbroad would be required to toe the same express advocacy line." "[T]he presence or absence of magic words cannot meaningfully distinguish electioneering speech from a true issue ad," according to the Court. While Title II prohibits corporations and labor unions from using their general treasury funds for electioneering communications, the Court observed that they are still free to use separate segregated funds (PACs) to run such ads. Therefore, the Court concluded that it is erroneous to view this provision of BCRA as a "complete ban" on expression rather than simply a regulation. Further, the Court found that the regulation is not overbroad because the "vast majority" of ads that are broadcast within the electioneering communication time period (60 days before a general election and 30 days before a primary) have an electioneering purpose. The Court also rejected plaintiffs' assertion that the segregated fund requirement for electioneering communications is under-inclusive because it only applies to broadcast advertisements and not print or Internet communications. Congress is permitted, the Court determined, to take one step at a time to address the problems it identifies as acute. With Title II of BCRA, the Court observed, Congress chose to address the problem of corporations and unions using soft money to finance a "virtual torrent of televised election-related ads" in recent campaigns. In upholding BCRA's extension of the prohibition on using treasury funds for financing electioneering communications to non-profit corporations, the McConnell Court found that even though the statute does not expressly exempt organizations meeting the criteria established in its 1986 decision in FEC v. Massachusetts Citizens for Life (MCFL), it is an insufficient reason to invalidate the entire section. As MCFL had been established Supreme Court precedent for many years prior to enactment of BCRA, the Court assumed that when Congress drafted this section of BCRA, it was well aware that it could not validly apply to MCFL-type entities. Subsequently, in the 2007 decision FEC v. Wisconsin Right to Life, Inc. (WRTL II), the Supreme Court held that Title II of BCRA was unconstitutional as applied to ads that Wisconsin Right to Life, Inc., sought to run. While not expressly overruling its 2003 ruling in McConnell v. FEC, the Court limited the law's application. Specifically, it ruled that advertisements that may reasonably be interpreted as something other than an appeal to vote for or against a specific candidate are not the functional equivalent of express advocacy and, therefore, cannot be regulated. The Court invalidated BCRA's requirement that political parties choose between coordinated and independent expenditures after nominating a candidate, finding that it burdens the right of parties to make unlimited independent expenditures. The Court invalidated BCRA's prohibition on individuals age 17 or younger making contributions to candidates and political parties. Determining that minors enjoy First Amendment protection and that contribution limits impinge on such rights, the Court determined that the prohibition is not "closely drawn" to serve a "sufficiently important interest."

McConnell v. FEC, a 2003 U.S. Supreme Court decision, upheld the constitutionality of key portions of the Bipartisan Campaign Reform Act of 2002 (BCRA) against facial challenges. (BCRA, which amended the Federal Election Campaign Act [FECA], codified at 2 U.S.C. SS 431 et seq., is also known as the McCain-Feingold campaign finance reform law). A 5 to 4 majority of the Court upheld restrictions on the raising and spending of previously unregulated political party soft money, and a prohibition on corporations and labor unions using treasury funds to finance "electioneering communications," requiring that such ads may only be paid for with corporate and labor union political action committee (PAC) funds. The Court also invalidated a requirement that parties choose between making independent expenditures or coordinated expenditures on behalf of a candidate, and a prohibition on minors age 17 and under making campaign contributions. A 2007 Supreme Court decision, FEC v. Wisconsin Right to Life, Inc. (WRTL II), while not expressly overruling McConnell, narrowed the application of BCRA. Finding that the BCRA "electioneering communications" provision was unconstitutional as applied to ads that Wisconsin Right to Life, Inc., sought to run, the Court in WRTL II held that advertisements that may reasonably be interpreted as something other than as an appeal to vote for or against a specific candidate cannot be regulated. For further discussion of WRTL II, see CRS Report RS22687, The Constitutionality of Regulating Political Advertisements: An Analysis of Federal Election Commission v. Wisconsin Right to Life, Inc., by [author name scrubbed].

Feed is the single largest input cost for cattle feeders, dairy, hog, and poultry producers, who are wary of government policies that can raise feed prices. These include commodity support or conservation programs that take cropland out of production, or ethanol incentives that bid up the price of corn, a key feed ingredient. Such incentives have already helped to boost significantly the portion of the total U.S. corn crop going to ethanol; a possible energy title in the next (2007) farm bill could further bolster feed grain demand and prices, animal producers worry. Unlike major crops such as grains, cotton, and oilseeds, animal products are not recipients of commodity price and income support program benefits. An exception is milk, where producers benefit from a combination of administered pricing under federal milk marketing orders, surplus dairy product purchases, and milk income loss payments. Also, some cattle and hog producers in a limited number of states are participating in livestock revenue insurance programs being administered by the U.S. Department of Agriculture's (USDA's) Risk Management Agency (RMA). A new farm bill likely will continue some form of milk price and/or income support and possibly could continue or even expand revenue insurance for livestock producers. Also see: CRS Report RL32712, Agriculture-Based Renewable Energy Production CRS Report RL34594, Farm Commodity Programs in the 2008 Farm Bill CRS Report RL34036, Dairy Policy and the 2008 Farm Bill CRS Report RL33037, Previewing a 2007 Farm Bill Animal producers who do not raise crops commercially lack access to federally subsidized crop insurance. Congress or the Administration has periodically made animal producers in declared disaster areas eligible for ad hoc federal payments, mainly to help defray the cost of purchasing off-farm feed following a disaster affecting on-farm feed production, or permitted producers to use conservation lands for haying and grazing. Issues include whether the government should assume more of livestock and poultry producers' disaster risks as they have for crop farmers, and whether Congress should establish a "permanent" aid program automatically triggered in times of disasters, in lieu of ad hoc legislation in virtually every recent year. Also see: CRS Report RS21212, Agricultural Disaster Assistance CRS Report RL31095, Emergency Funding for Agriculture: A Brief History of Supplemental Appropriations, FY1989-FY2009 Changes in the structure and business methods of the livestock and meat sectors appear to be rapidly transforming U.S. animal agriculture. Animal farms continue to diminish in number and expand in average size. A relative handful of large firms process animal products, and these firms increasingly seek to control or at least better coordinate all phases of production and marketing, often to meet the specific requirements of large retail chains that want to satisfy consumer demand for a range of lower-cost products. Critics assert that these trends have undermined the traditional U.S. system of smaller-scale, independent, family-based farms and ranches, by eroding farmers' negotiating power, lowering farm prices, and forcing all but the largest operators out of business. Others counter that the sector's structural changes are a desirable outgrowth of factors such as technological and managerial improvements, changing consumer demand, and more international competition. In 2007, various bills have been proposed to address perceived "competition" problems. Among them are proposals to regulate meat packer ownership or acquisitions of cattle ( S. 305 ; S. 786 ); to give farmers more options to dispute provisions in contracts with processors (in 2007, S. 221 ); and to broaden protections under, and strengthen administration, of the Packers and Stockyards Act and other antitrust laws ( S. 622 ). These or other so-called competition options could become the basis for a proposed competition title in a new 2007 farm bill. See also: CRS Report RL33325, Livestock Marketing and Competition Issues Outbreaks of animal diseases like avian influenza (AI), foot and mouth disease (FMD), BSE, brucellosis, and tuberculosis are seen as perhaps the greatest potential threats to animal production. Even where U.S. cases have been few (as with BSE) or quickly contained (as with various strains of AI), the impacts can be economically devastating, causing production losses, closed export markets, and a decline in consumer confidence. Some animal diseases, like AI and BSE, have the potential to harm humans. Cattle producers, meat processors, and the feed industry are anticipating an upcoming decision by the U.S. Food and Drug Administration (FDA) on whether to finalize or amend a proposed rule that would prohibit the use of higher-risk cattle parts (i.e., those more likely to harbor the BSE agent) in all animal feeds. The proposal would be more restrictive than the FDA's rule that now bans most mammalian parts from cattle feed only, as a way to prevent BSE's spread through animal feeding. However, the industry believes the economic costs of the proposed rule could be extremely high. Many producers appear to agree that a nationwide animal identification (ID) system that can trace animals from birth to slaughter is a critical tool for quickly finding and controlling future animal diseases. More foreign markets are demanding animal traceability, and other meat-exporting countries are adopting ID programs, it is noted. Despite several years of USDA effort and public funding totaling an anticipated $118 million through FY2007, a universal U.S. system is not expected to be in place for some time, as policy makers debate numerous questions about its design and purpose. Should animal ID be mandated? What data should be collected and who should hold it, government or private entities? To what extent should producer records be shielded from the public and government agencies? Should traceability be expanded to follow meat and poultry products from farm to consumer, and/or used for other purposes such as food safety or certification of labeling claims? How much will it cost, and who should pay? In the 110 th Congress, H.R. 1018 would prohibit mandatory ID and address privacy concerns. Other bills intended to address many of these questions could emerge, possibly as farm bill items. Also see: CRS Report RL32199, Bovine Spongiform Encephalopathy (BSE, or "Mad Cow Disease"): Current and Proposed Safeguards CRS Report RL32012, Animal Identification and Meat Traceability Another possible, and somewhat related, item is country-of-origin labeling (COOL), which the 2002 farm bill required of many retailers of fresh produce, red meats, seafood, and peanuts. Although the seafood labeling rules are in place, Congress has delayed implementation for red meats, produce, and peanuts until September 30, 2008, while lawmakers continue to debate the need for, and anticipated costs and benefits of, COOL. In the 110 th Congress, bills ( H.R. 357 ; S. 404 ) have been introduced that would require implementation by September 30, 2007. See also: CRS Report RS22955, Country-of-Origin Labeling for Foods The United States is one of the leading exporters of livestock and poultry products, which have been among its fastest-growing categories of agricultural exports. However, U.S. market share is being challenged, and for some products surpassed, by highly competitive foreign exporters such as Brazil, Australia, India, Argentina, and New Zealand in beef/veal, Canada and Brazil in pork, and Brazil in poultry. U.S. exporters also face foreign trade barriers such as high import tariffs and divergent foreign food safety and animal health measures (sometimes regarded as baseless by the exporters). Examples of recent problems include Russia's restrictions on U.S. beef and pork exports, purportedly over animal disease concerns, Japan's and Korea's slowness in ramping up U.S. beef imports due to a limited number of cases here of bovine spongiform encephalopathy (BSE or mad cow disease), and a longstanding European Union ban on importation of meat from animals treated with growth hormones approved for use here. Trade Promotion Authority (TPA), which permits the President to negotiate trade deals and present them to Congress for an up or down vote without amendment, expires on June 30, 2007, making renewal a topic in the 110 th Congress. The Administration has used TPA to pursue an ambitious series of bilateral and regional free trade agreements (FTAs) as well as to participate in negotiations for new multilateral trade rules under the World Trade Organization (WTO). U.S. interests seek assurances that any new agreements will not favor foreign over U.S. animal products. Many farmers and ranchers also are wary of signing new agreements when, in their view, some countries have not fulfilled obligations under existing agreements to lower tariffs and/or non-tariff barriers that have blocked meat and poultry exports. Also see: CRS Report RL33144, WTO Doha Round: The Agricultural Negotiations CRS Report RL33463, Trade Negotiations During the 110th Congress CRS Report RL33472, Sanitary and Phytosanitary (SPS) Concerns in Agricultural Trade Questions about the applicability of federal environmental laws to livestock and poultry operations have been controversial and have drawn congressional attention. As animal agriculture increasingly concentrates into larger, more intensive production units, concerns arise about impacts on the environment, including surface water, groundwater, soil, and air. Some environmental laws specifically exempt agriculture from regulatory provisions, and some are designed so that farms escape most, if not all, of the regulatory impact. The primary regulatory focus for large feedlots is the Clean Water Act, since contaminants from manure, if not properly managed, also affect both water quality and human health. Operations that emit large quantities of air pollutants may be subject to Clean Air Act regulation. In addition, concerns about applicability of Superfund to livestock and poultry operations are of growing interest. Bills to exempt animal manure from federal Superfund requirements have been introduced in the past and could re-emerge in the 110 th Congress. The House and Senate Agriculture Committees do not have direct jurisdiction over federal environmental law, but they do have a role in the issue. For example, under the conservation title of recent farm bills, the Environmental Quality Incentives Program (EQIP) has provided financial and technical assistance to farmers to protect surrounding resources; livestock receives 60% of the funds. Also see the following reports: CRS Report RL31851, Animal Waste and Water Quality: EPA Regulation of Concentrated Animal Feeding Operations (CAFOs) CRS Report RL32948, Air Quality Issues and Animal Agriculture: A Primer CRS Report RL33691, Animal Waste and Hazardous Substances: Current Laws and Legislative Issues CRS Report R40197, Environmental Quality Incentives Program (EQIP): Status and Issues USDA's Food Safety and Inspection Service (FSIS) is responsible for inspecting most meat, poultry, and processed egg products for safety and proper labeling. The Food and Drug Administration (FDA) is responsible for ensuring the safety of all other foods, including seafood, and also regulates animal feed ingredients. For years Congress has monitored the efforts of FSIS and industry to address the problem of microbial contamination, which has caused outbreaks of severe and sometimes fatal foodborne illness. A long-standing issue is the effectiveness of these efforts and the need, if any, for policy changes (such as increased FSIS resources or more efficient ways of assigning existing resources to the highest risk plants or products). Another concern is the use of antibiotics to control disease, promote growth, and address well-being in food-producing animals. Some argue that antibiotic overuse in animal production can lead to resistance to related drugs used in humans, and that FDA should discontinue unnecessary animal uses. Others counter that such assertions have not been scientifically proven and that restrictions would raise production costs by millions of dollars and harm the quality of animal products. Various proposals related to meat safety have been offered in recent years, including proposals to clarify USDA's use of microbial performance standards; to allow state-inspected meat and poultry products to be sold outside the state (to which they are currently restricted); to give USDA more authority to recall suspect meat and poultry products; to tighten controls on imports; and to restrict nontherapeutic use of medically important antibiotics in livestock (e.g., H.R. 962 and S. 549 in the 110 th Congress). Some would reorganize federal food safety responsibilities, possibly within a single new agency (e.g., H.R. 1148 , S. 654 ). See also: CRS Report RL32922, Meat and Poultry Inspection: Background and Selected Issues Biotechnology--a term often used as a synonym for such technologies as genetic engineering, genetic modification, transgenics, recombinant DNA techniques, and cloning--has been promoted as a way to improve animal productivity and quality; to introduce new food, fiber, and medical products; and to protect the environment. Criticisms range from food safety and social resistance to potential negative impacts on animal welfare and on ecosystems. In the 110 th Congress, early interest focuses on FDA's publication in the January 3, 2007 Federal Register of a long-awaited draft risk assessment which finds that meat and milk from cloned cattle, pigs, and goats and their offspring are as safe to eat as those of conventionally bred animals, although animal health problems may be more frequent than in other assisted reproductive technologies. Members may be asked to review the benefits and costs of cloning and other biotechnologies, and to refine existing laws to ensure adequate oversight. S. 414 and H.R. 992 , for example, would require the labeling of foods from cloned animals or their offspring; H.R. 1396 and S. 536 would not permit organically labeled foods to be derived from such animals. Also see: CRS Report RL33334, Biotechnology in Animal Agriculture: Status and Current Issues Farm animals are not covered by the Animal Welfare Act, which requires minimum care standards for many other types of warm-blooded animals. Farm animals are covered by federal laws addressing humane transport and slaughter, however. Animal activists periodically seek new legislation that would further regulate on-farm or other animal activities, such as bills to prohibit the slaughter of horses for human food (one passed the House but not the Senate in September 2006; another has been introduced in the 110 th Congress as H.R. 503 / S. 311 ), to require the federal government to purchase products derived from animals only if they were raised according to specified care standards, and to prohibit the slaughter for food of disabled livestock (introduced in 2007 as H.R. 661 and S. 394 ), among others. Members of the House and Senate Agriculture Committees generally express a preference for voluntary approaches to humane methods of care. For example, Smithfield Farms, the largest U.S. pork producer, recently announced that it would require its producers to phase out the use of gestation crates, which many animal welfare advocates believe provide far too little room for hogs to move around. See: CRS Report RS21978, Humane Treatment of Farm Animals: Overview and Issues CRS Report RS21842, Horse Slaughter Prevention Bills and Issues CRS Report RS22493, The Animal Welfare Act: Background and Selected Legislation , by [author name scrubbed]

The value of animal production on the 1.3 million U.S. dairy, livestock, and poultry farms (2002 Census of Agriculture) averages about $124 billion annually, more than half the total value of all U.S. agricultural production. The United States produces--and consumes--more beef/veal, pork, poultry, and milk than almost any other single country (China leads in pork). U.S. exports have grown rapidly in recent decades, as has integration of U.S. meat production and processing with that of Mexico and Canada. Farming, processing, and marketing have all trended toward larger and fewer operations (often called consolidation). Increasingly, many phases of production and marketing may be managed or controlled by a single entity (sometimes called vertical integration). Complying with environmental and food safety regulations, and addressing changing consumer preferences about how food is produced, have added to costs and operational complexities for producers and processors alike. In Congress, policy debate has revolved around impacts of the sector's structural and technological changes on farm prices, on the traditional system of smaller-sized, independent farms and ranches, and on rural communities and workers. Also at issue are implications for consumers, the environment, and trade. Inherent in these questions, which could be addressed during consideration of a new farm bill in 2007, is the appropriate role of government in intervening in or assisting the livestock, meat, and poultry industries. The following brief overview of selected issues is drawn from the CRS reports noted here, where sources and additional details can be found.

The purpose of this report is to provide data on the size and composition of USPS's workforce between FY1995 and FY2014. Reforms to the size and composition of the workforce have been an integral part of USPS's strategy to reduce costs and regain financial solvency, particularly after the onset of substantial revenue losses in FY2007. Historical context on USPS's workforce size and composition is therefore useful to understanding the magnitude of these workforce reforms and their impact on USPS's financial condition. Between FY1995 and FY2014, the size of USPS's workforce decreased 29.4%, from 874,972 employees to 617,877 employees ( Table 2 ). Data on the overall workforce during this 20-year period show a rise in employees in the 1990s and a decline in employees from the 2000s through the present. During this time, USPS's workforce peaked in FY1999 with 905,766 employees. The USPS workforce experienced the steepest decrease in the past two decades between FY2008 and FY2009--a decrease of 53,006 employees, or 7.4% of the overall workforce. It can be noted that the Great Recession occurred between these years, which might have contributed to the decrease. In FY2013, USPS operated with its smallest workforce in at least 20 years ( Figure 1 ). Figure 2 shows the USPS workforce by state. USPS categorizes its workforce into two types of employees: career and non-career. Career employees serve in permanent positions on a full-time or part-time basis and typically receive full federal benefits. Non-career employees, in contrast, serve in time-limited or otherwise temporary positions on a full-time or part-time basis. In many cases, non-career employees earn lower wages and are not provided benefits that are provided to career employees. For example, non-career employees are not eligible for federal life insurance and are not covered under the Federal Employees Retirement System (FERS). Figure 3 shows trends in career and non-career USPS employment from FY1995 to FY2014. The number of career employees decreased 35.2% between FY1995 and FY2014, from 753,384 to 488,300. The number of non-career employees, in contrast, increased 6.6% over that time period, from 121,588 to 129,577 ( Table 2 ). Table 1 illustrates career and non-career employees as a percentage of the USPS workforce over the past 20 years. Career employees have constituted the vast majority of USPS's workforce during the past two decades. The proportion of non-career employees, however, has risen since FY1995. The percentage of USPS's workforce that is non-career increased from 13.9% in FY1995 to 21.0% in FY2014. In contrast, the percentage of USPS's workforce consisting of career employees declined from 86.1% to 79.0% between FY1995 and FY2014. ( Figure 4 , Table 1 ). Figure 4 shows the yearly percentage change in USPS workforce size, disaggregated by career and non-career employees. As the trend lines indicate, the percentage change in career employees has remained relatively stable, though it has been negative for the past decade. In contrast, the percentage change in non-career employees shows greater variance over time. There was a discernible uptick in the non-career workforce between FY2011 and FY2013--the percentage change in non-career employees increased from a 1.0% gain between FY2010 and FY2011, to a 42.8% gain between FY2011 and FY2013. USPS reported data in 19 total career categories since FY1995, though this number includes some categories in which the position had yet to be instituted in FY1995 (N/A in the last column of Table 2 ) or discontinued by FY2014 (-100.00% in the last column of Table 2 ). Thirteen career employment categories have remained intact between FY1995 and FY2014. Of these categories, 10 had fewer employees in FY2014 than in FY1995. The "Professional Administrative and Technical Personnel" category experienced the greatest percentage decrease in employees from FY1995 to FY2014, with a 60.4% decrease (6,634 fewer employees). Three of the 13 categories of employees populated from FY1995 through FY2014 experienced an increase in their level of employment. "Headquarters" experienced the largest increase in percentage change (60.8%), while "Rural Delivery Carriers--Full-Time" experienced the largest increase in actual numbers (20,260 more employees). USPS stated the increase in the number of headquarters employees is primarily attributable to the agency's efforts to centralize certain local, district, and area functions at the headquarters level. Such efforts shifted positions from non-headquarters to headquarters-related categories. For example, USPS centralized human resources (HR) functions at an HR Shared Services Center, which prompted the agency to reallocate positions from field offices to headquarters. While the percentage change in the "Headquarters" category has increased over the past 20 years, the increase is primarily attributable to a significant uptick in employees between FY2003 and FY2004 (41% increase). Since FY2004, the percentage increase in headquarters employees has slowed to 8.3%. In addition, the remaining headquarters-related employment categories that were in place in FY1995 have since decreased. USPS has reported data in eight non-career categories since FY1995, which includes categories that were established or eliminated after FY1995. Decreases occurred in three of the four non-career employee categories that have remained intact since FY1995. The number of casuals, or temporary employees who do not receive full-time employee benefits, dropped 93.7% from 26,401 employees in FY1995 to 1,658 in FY2014. The number of "Non-Bargaining Temporary" employees decreased approximately 53.7% from 596 in FY1995 to 276 in FY2014. The number of "Rural Subs/RCA/RCR/AUX" employees decreased 4.3% from 50,269 in FY1995 to 48,099 in FY2014. One non-career category, "PM Relieve/Leave Replacements," experienced an increase of 433 employees (3.4%) from FY1995 to FY2014. Since FY2011, USPS has established three new non-career employee categories: Postal Support Employees (PSEs), City Carrier Assistants (CCAs), and Mail Handler Assistants (MHAs). As of September 30, 2014, USPS had 24,781 PSEs, 36,081 CCAs, and 5,475 MHAs. PSEs, CCAs, and MHAs were created pursuant to USPS's contract agreement with, respectively, the American Postal Workers Union (APWU), National Association of Letter Carriers (NALC), and National Postal Mail Handlers Union (NPMHU). The three positions are part of their unions' bargaining units and are eligible for raises, health benefits, and leave. Although the size of each employment category has shifted over the past 20 years, three overarching trends are apparent. First, the category of full-time rural delivery carriers exhibited moderate growth, rising 43.9% from 46,113 in FY1995 to 66,373 in FY2014. In contrast, the number of city delivery carriers dropped 31.4% from 239,877 in FY1995 to 164,626 in FY2014. USPS has indicated that 65% of population growth occurred in rural areas for much of the 20-year period. USPS further indicated that USPS mail volume increased in these areas through 2009, leading to a greater need for delivery carriers in those areas. Second, two categories of USPS employees involved in the transportation of mail prior to its delivery grew in the 1990s, peaked around FY2000, and declined below their FY1995 levels in FY2014. The number of mail handlers was 57,352 in FY1995, 62,247 in FY1998, and 38,910 in FY2014. Motor vehicle operators numbered 8,029 in FY1995, 9,347 in FY2000, and 6,603 in FY2014. These downward trends might be due to a decline in mail volume, as well as increased automation of mail transportation functions, over the 20-year period. Third, the number of non-bargaining temporary employees increased by 493.5% from 596 in FY1995 to 3,537 in FY2012, but has since dropped to 276 in FY2014. In recent years, the USPS has experienced significant financial challenges. After running modest profits from FY2004 through FY2006, the USPS lost $51 billion between FY2007 and FY2014. As USPS's finances have deteriorated, its ability to absorb operating losses has diminished. Between FY2005 and FY2014, USPS's debt rose from $0 to $15 billion. The Government Accountability Office (GAO) added the USPS's financial condition "to the list of high-risk areas needing attention by the Congress and the executive branch." Among the causes for the USPS's financial downturn is the large drop in mail volume in that stretch of time. Between FY2007 and FY2014, the number of mail pieces delivered per year fell from 212 billion to 155 billion. As a result, operating revenues were $7 billion lower in FY2014 ($67.8 billion) than in FY2007 ($74.8 billion). The USPS's challenging financial circumstances have prompted it to undertake cost-cutting measures. One strategy has been to reduce the size and cost of the USPS workforce, as personnel costs comprise the majority of USPS's expenses. In FY2014, for example, personnel costs represented 78% of USPS's total operating expenses. Two initiatives that USPS pursued between FY2007 and FY2014 to reduce workforce size and cost included (1) attrition and separation incentives, and (2) increased utilization of non-career employees. USPS has reduced its workforce size through voluntary attrition and separation incentives to retire or resign. Between FY2007 and FY2014, there was a reduction of 168,052 employees from USPS's workforce. To increase the voluntary attrition rate, USPS has offered certain employees separation incentives to resign or retire early. Those incentives have ranged from $10,000 to $20,000 per person. Between FY2010 and FY2014, 55,473 employees accepted a separation incentive ( Table 3 ). USPS has utilized separation incentives to avoid reductions in force (RIFs), which involve involuntary employee layoffs upon the abolishment of agency positions. On January 9, 2015, however, USPS implemented a reduction in force for 249 postmasters who did not accept a separation incentive offered in FY2014. Of the 249 postmasters subject to the reduction in force, 169 opted for a Discontinued Service Retirement (DSR), and the remaining 80 who were not eligible for DSR received severance pay based on their age and years of service. According to USPS, all postmasters affected by the RIF were offered part-time career positions at USPS. It is unclear if USPS will continue to use separation incentives to reduce the size of its career workforce. USPS's 2012-2017 business plan, which was updated in April 2013, included a goal to reduce its career workforce to approximately 404,000 employees through attrition by 2017. This represents a 17.3% decrease (84,300 fewer employees) from FY2014 staffing levels. In October 2015, USPS staff stated that the agency was developing an updated five-year business plan. It is possible that the updated plan might contain new strategies for increasing the cost efficiency of the workforce, including the alteration or removal of workforce reduction goals. The use of separation incentives, therefore, might be affected by such altered goals. USPS has also increased its use of non-career employees in an effort to contain costs. The number of non-career employees increased by 28.1% between FY2007 and FY2014, from 101,167 to 129,577. The number of career employees, in contrast, decreased by 28.7% over the same time period, from 684,762 to 488,300. The most substantial increases occurred between FY2011 and FY2014, during which time the number of non-career employees rose by 46.1% (40,878 more employees). The influx of non-career employees during that time period was primarily attributable to the creation and staffing of PSEs (FY2011), CCAs (FY2013), and MHAs (FY2013). These three employee categories constituted 51% of the USPS non-career workforce in FY2014. According to USPS and the USPS Office of the Inspector General (OIG), PSEs, CCAs, and MHAs were created to reduce the costs of, and provide more flexibility in, certain agency functions. Employees in these three positions can often perform the full range of duties undertaken by their career counterparts, but at lower wages. For instance, CCAs can perform the duties of career city letter carriers at a starting rate of $15.00 versus $16.71 per hour. The wage difference between CCAs and city letter carriers is even greater after accounting for benefits and overtime ($19.35 versus $46.11 per hour, respectively), according to a 2014 GAO report. USPS asserted that CCAs reduced the cost of the city mail delivery function by $120 million in FY2013. In addition, the USPS OIG reported that PSEs could be used in place of career employees earning overtime, and thus could reduce compensation costs. USPS's use of certain non-career employees is governed by postal labor union contracts, which limit the number of non-career employees that can comprise the total USPS workforce. More recent labor contracts that created PSEs, CCAs, and MHAs, however, raised the number of non-career employees that can be used for certain functions ( Table 4 ). For example, the 2006-2011 contract between USPS and the National Association of Letter Carriers (NALC) limited the total number of non-career transitional employees to no more than 3.5% of the total number of career city letter carriers covered by the agreement or 6% of the total number of career carriers in a postal district. The 2011-2016 contract, however, raised the limit to 15% of the total number of career carriers in a district. USPS's initiatives to reduce the size and cost of its workforce have contributed to lowered compensation expenses in recent years. USPS's total compensation costs decreased $526 million from FY2013 to FY2014. A 2015 Postal Regulatory Commission (PRC) report found that 36.1% of that amount ($190 million) resulted from increased use of non-career employees and a decrease in employee work hours. The remaining 63.9% of the reduced amount ($336 million) reflected a one-time cost of separation incentives that were paid in FY2013, according the PRC report. A 2014 GAO report on the USPS workforce, however, found that USPS's overall expenses did not decline alongside reduced workforce size and employee work hours. Rather, the report found that USPS's total expenses fluctuated between FY2006 and FY2014. The report attributed the fluctuation to required annual Retiree Health Benefits Fund (RHBF) payments, which varied by year. USPS's overall expenses still declined at a slower rate compared to employee work hours (7.1% versus 24%, respectively) when excluding RHBF payments, according to the report. In response to the GAO report, USPS attributed the slower rate of decline in overall expenses to increased hourly wage and benefit costs, increased non-personnel expenses, and other fixed costs that do not decline with decreases in mail volume. USPS's 2012-2017 business plan includes several legislative proposals that could affect the size and cost of the workforce. However, USPS staff have indicated that these legislative proposals are no longer being pursued. The agency is focusing on consensus building among stakeholders rather than pursuing a specific legislative agenda. Career Employees Area Offices Personnel: Includes persons who work in the USPS administrative units that oversee postal operations in USPS's nine geographic areas throughout the United States. Building and Equipment Maintenance Personnel: Includes persons who maintain and repair USPS facilities. Clerks: Includes persons who work directly with the public in USPS retail facilities and who manually sort mail. City Delivery Carriers: Includes persons who deliver mail in urban and non-rural areas. Headquarters: Includes persons who work in a variety of capacities at the two central offices of the U.S. Postal Service, which are located in Washington, DC, and Rosslyn, VA. Headquarters--Related Field Units: Includes persons in offices administered from USPS's headquarters, but who are located elsewhere. Inspection Service--Field: Includes persons who work for the Postal Inspection Service, which protects USPS property and employees and investigates alleged misuse of the mails for criminal purposes. Inspector General: Includes persons who work for the USPS Office of Inspector General, which audits and investigates USPS activities. Mail Handlers: Includes persons who move mail containers in mail processing centers. Motor Vehicle Operators: Includes persons who drive mail trucks. Nurses: Includes persons who work in USPS medical units and attend to injured employees. Postmasters/Installation Heads: Includes persons who serve as managers of retail postal facilities. Professional Administrative and Technical Personnel: Includes persons performing administrative assistance and technical support duties. Regional Offices: Included persons in the administrative unit that oversaw USPS operations within geographic regions. Regional offices were replaced with area offices. Rural Delivery Carriers-- Full-time: Includes persons who deliver mail in non-urban areas. Special Delivery Messengers: Discontinued position that employed persons to make deliveries that required expedited delivery. Supervisors/Managers: Includes persons who supervise other persons or who manage programs or processes. Vehicle Maintenance Personnel: Includes persons who perform preventive maintenance and repair of USPS vehicles. Non-Career Employees Casuals: Includes persons hired temporarily to assist USPS career employees in mail processing facilities. City Carrier Assistant: Time-limited position created in 2013 that provides the USPS with flexibility in hiring for the city delivery function. City Carrier Assistants may perform the full range of duties undertaken by career City Delivery Carriers and are entitled to certain employee benefits such as raises, health benefits, and leave. Mail Handler Assistant: Time-limited position created in 2013 that provides the USPS with flexibility in hiring for the mail delivery function. Mail Handler Assistants may perform the full range of duties undertaken by career Mail Handlers and are entitled to certain employee benefits such as raises, health benefits, and leave. Non-bargaining Temporary: Includes persons hired temporarily to perform administrative duties in USPS offices. Postal Support Employees: Time-limited position created in 2011 that provides the USPS with flexibility in hiring within the clerk craft and the maintenance and motor vehicle craft. Pursuant to a bargaining agreement, Postal Support Employees are entitled to certain employee benefits such as raises, health benefits, and leave. Postmaster Relief/Leave Replacements: Includes persons who serve temporarily as managers of retail postal facilities. Rural Subs/RCA/RCR/AUX: Includes rural substitute carriers, rural carrier associates, rural carrier relief carriers, and auxiliary carriers, all of whom provide temporary assistance to USPS in the delivery of mail in non-urban areas. Transitional Employees: Includes persons who staff USPS's Remote Encoding Centers (RECs), which provide assistance concerning mail processing machines.

This report provides data from the past 20 years on the size and composition of the U.S. Postal Service's (USPS's) workforce. Reforms to the size and composition of the workforce have been an integral part of USPS's strategy to reduce costs and regain financial solvency, particularly between FY2007 and FY2014. Since 2007, USPS has experienced significant revenue losses that have affected its ability to manage its expenses. Personnel costs are one of the primary drivers of USPS's operating expenses. As such, USPS has employed strategies to reform the size and composition of its workforce in an effort to cut personnel costs, primarily through attrition and separation incentives and increased use of lower-cost employees. These strategies reduced personnel expenses between FY2013 and FY2014. The sustainability of these reduced expenses and their overall impact on USPS's ability to regain financial solvency, however, is unclear. The size of the USPS workforce has declined in the past 20 years. The number of employees has dropped by 257,095 (29.4%) in the past 20 years, from 874,972 in FY1995 to 617,877 in FY2014. USPS, however, had 163 more employees at the end of FY2014 than it did at the end of FY2013. Declines in workforce size between FY2010 and FY2014 were driven, in part, by USPS's efforts to reduce its workforce size through attrition and separation incentives. Between FY2010 and FY2014, 55,473 career employees accepted a separation incentive to retire or resign early. On January 9, 2015, USPS instituted a reduction in force for 249 postmasters who did not accept a separation incentive offered in 2014. The composition of USPS's workforce has also changed over the past two decades. USPS categorizes its workforce into two types of employees: career and non-career. Career employees serve in permanent positions on a full-time or part-time basis and typically receive full federal benefits. Non-career employees serve in time-limited or otherwise temporary positions and can often perform the full range of duties of career counterparts at lower wage rates, which might lower personnel costs. USPS has increased the number of non-career employees in an effort to reduce personnel costs, particularly since FY2011. Between FY2011 and FY2014, the number of non-career employees increased by 46.1%, from 88,699 to 129,577 employees. The influx in non-career employees since FY2011 is primarily attributable to the establishment of three new non-career positions: postal support employees, city carrier assistants, and mail handler assistants. Labor union contracts governing these positions, which went into effect in 2011 and 2013, effectively raised the total number of non-career employees that can comprise the USPS workforce. Career employees, however, continued to comprise the majority of the total workforce in FY2014 (79%). This report will be updated as events warrant.

Natural gas markets in North America had a tumultuous year in 2008. This contrasted with the relative stability of 2007. In early 2008, the market tightened and prices moved up. In the summer, supply area spot prices went much higher than in the past, then decreased through the rest of the year to end lower than at the start of the year. This report examines current conditions and trends in the U.S. natural gas markets. Key market elements examined include prices, consumption, production, imports, and infrastructure. Expectations about the future, as reflected in recent official forecasts, are also incorporated here. Natural gas remains an important and environmentally attractive energy source for the United States and supplied approximately 24% of total U.S. energy in 2008. Domestic supply has recently increased significantly. New developments in Alaska increase the likelihood that a pipeline from the North Slope will proceed, although uncertainty remains regarding this undertaking. The natural gas industry continues to attract capital for new pipeline and storage infrastructure to link shifting loads and supply sources. In 2008, liquefied natural gas (LNG) imports decreased 54% from the record levels of 2007, decreasing already low utilization factors at import facilities. The Federal Energy Regulatory Commission (FERC) approved two more major import terminals in 2008. Given the generally adequate functioning of natural gas markets, congressional attention may address development of new supply sources (such as deep shale gas), unexpected price volatility or behavior, or import and other supply issues. In the longer term, industry pressure for increased access to public lands for exploration and production may continue as a policy concern. This report reviews key factors likely to affect market outcomes. These factors include weather, the economy, oil prices, and infrastructure development. Table A -1 to Table A -6 (in Appendix A ) present selected highlight statistics that illustrate current market status. Briefly, important developments in natural gas markets during 2008 include the following: Domestic natural gas production increased to 20.5 trillion cubic feet, the most since 1974. Hurricanes Gustav and Ike reduced Gulf of Mexico production but did not affect market prices significantly. There was an unusual price pattern in the first half of 2008, with citygate (delivered) prices lower than Henry Hub spot prices. Citygate prices have seldom exceeded Henry Hub prices. The natural gas spot price at Henry Hub peaked on July 3, 2008, at $13.32 per million Btu and declined to under $6 by end of year. During the 2007-2008 heating season (October to March), average wellhead prices increased more than 30%, according to the U.S. Energy Information Administration (EIA) estimates. Natural gas for power has reduced seasonal variation in use because gas-for-power peaks in summer, versus the total natural gas use peak in winter. The power generation sector used more natural gas than any other sector in 2008 and 2007. Storage levels towards the end of the 2007-2008 heating season dropped below five year averages. In the first storage report after the 2007-2008 heating season, working gas storage was at 1,234 billion cubic feet (Bcf) - the lowest level since April 30, 2004. However, as of December 2008, working gas storage was at 2,840 Bcf. LNG imports in 2008 dropped 54% from the 2007 record level of 77.1 billion cubic feet. The future outlook is uncertain. FERC approved 2 import facilities in 2008, with an import capacity increase of 2 billion cubic feet per day. Natural gas infrastructure development continued to advance, with more pipeline and storage projects successfully completed in 2007 and more underway in 2008. Industrial gas use had some growth in 2008, continuing increases since 2006. Unlike the global oil market, natural gas markets remain generally regional, with global trade in LNG growing. For the most part, North America has a continent-wide market that is integrated through a pipeline network that connects the lower-48 states, the most populous provinces of Canada, and parts of Mexico. Prices throughout this integrated market are influenced by demand (which may be influenced by weather, economic conditions, alternative fuel prices, and other factors), supply, and the capacity available to link supply sources and demand loads (transmission and distribution systems). The U.S. natural gas market is the major component of the North American natural gas market. It accounts for about 81% of North American consumption and about 70% of North American supply. The key price point in North America is Henry Hub. Henry Hub is a major pipeline hub near Erath, Louisiana, that is used as the designated pricing and delivery point for the New York Mercantile Exchange (NYMEX) gas futures contracts and other transactions. The price difference between other locations and Henry Hub is called the "basis differential." When there is spare capacity available to move natural gas from Henry Hub, or the Gulf of Mexico region in general, to the relevant price point area, the basis differential tends to be low, approximating the costs of fuel used to move the gas to the location. When capacity availability is tight, basis differentials can grow because the driving force can become the value of the natural gas at the delivery point, rather than the cost of getting the natural gas to that point. Natural gas prices also incorporate costs for distributing the gas from the wholesale marketplace to retail customers. These rates are generally determined by state regulators and involve both (1) the approval of costs and rates of return and (2) the allocation of costs among customer classes (e.g., residential, commercial, industrial firm, industrial interruptible). Although the North American natural gas market remains a distinct regional market, it is connecting to a global gas marketplace through international LNG trade. Oil prices still affect U.S. natural gas prices and this evolving relationship is discussed later in this report. The key elements of the market are prices, consumption, and supply. This section provides highlights from recent market developments relating to these factors. The price stability of 2006 and 2007 ended in 2008. Early 2008 prices increased at a faster pace than in 2007. According to EIA figures, spot prices at Henry Hub increased about 70% from January 1 to July 3, 2008, peaking at $13.31 per million Btu (MMBtu). The price then decreased to $5.83 per MMBtu by the end of December 2008, ending the year about 28% below the start-of-year price. (See Figure 1 for price graph.) The U.S. Energy Information Administration reports producer price data for its wellhead price series. During the 2007-2008 heating season (October to March), EIA estimates the average wellhead price increased more than 30%, to $8.06 per MMBtu. The highest monthly value was $10.52 per MMBtu in June. The EIA citygate price series reflects the unit prices delivered to consuming areas. The average U.S. citygate price increased $1.03 to $9.15 per thousand cubic feet (mcf) from 2007 to 2008. From 2006 to 2007, LNG import prices continued to decrease, from $7.19 per mcf to $7.07. (EIA full year 2008 LNG price data are not yet available.) At the retail level, average U.S. residential natural gas prices were $13.52 per MMBtu in 2008, with a high of $19.74 in July. This average was about 5% increase from 2007. The average commercial price was $11.76 per MMBtu, an increase of about 6% from 2007. Industrial prices increased about 25% to $9.61 per MMBtu. Yearly totals are not yet available for natural gas sold for electric power; as of September 2008, prices had increased 25% versus September 2007 however. (See Figure 2 for price chart.) The spot price of natural gas is a key indicator of the price that producers or LNG importers are receiving for spot sales in the major producing area of the Gulf of Mexico. From there, the gas generally moves to markets to the north (e.g. Chicago), to the east (e.g. New York), or around the Gulf (e.g. Florida). This transmission to market generally leads to a transport cost add-on and a higher price at the delivery point. Since the Henry Hub spot price was first reported in 1993 until 2008, this price has exceeded the EIA citygate (delivered price) in only eleven months (see Figure A -1 in Appendix A ). In the first half of 2008, the Henry Hub spot price exceeded the EIA reported citygate price in three consecutive months (April, May, and June). The spot price at Henry Hub appears to have increased quickly in the first half of 2008, and this price at Henry Hub (a supply area price benchmark) actually exceeded the EIA estimated average citygate (the "delivery points" in consumption areas) price. CRS has found no discussion of this price anomaly in market monitoring documents from that period. One possible explanation for this anomaly is that the citygate price includes multi-month contracted-for supplies that would include natural gas from earlier months when prices were lower than the current spot price. Greater production from shale areas near markets or storage gas withdrawal could be other explanations. Total U.S. consumption of natural gas grew almost 1% from 2007 to 2008, according to EIA. Power sector use of natural gas decreased about 2.8% in 2008. Commercial and residential sectors grew more than 3% each and industrial use (without lease and plant use) increased 0.3%. The power sector led end-use consumption for the first time in 2007 and maintained its position as the sector using the most gas in 2008. Power and industrial use were essentially equal for 2008. ( Table 1 shows the consumption data.) U.S. natural gas supply comes from domestic production, pipeline imports, imported LNG, and net withdrawals from storage. In a major shift, domestic supplies increased more than 7% between 2007 and 2008. Total production for 2008 exceeded 20.5 trillion cubic feet, the most since 1974. Net imports decreased in 2008. The dry gas production increased 7.8% to 20,571 billion cubic feet in 2008, reflecting in part the increase in drilling activity in response to price increases, as indicated in the natural gas rig count. The U.S. natural gas rig count has trended upward since 2002. In 2002, the average monthly rig count was about 600. The count reached 1,606 in September 2008, before decreasing to 1,366 late in the year. Recent news accounts report that natural gas rigs have declined about 45% since September 2008, the most rapid decline since 2002. In 2008, U.S. consumers received most of their supply, 91%, from domestic production. Net imports (pipeline and LNG) decreased over 20% to 2,996 Bcf in 2008. Imports via pipeline from Canada decreased 5%. LNG imports in 2008 decreased 54% from 2007 after increasing 32%, to a record level, between 2006 and 2007. (See Table 2 .) In 2008, available LNG supplies were sometimes bid away to European terminals for higher prices. Nevertheless, new U.S. LNG infrastructure went into service in 2008 and still more received approvals from FERC. To compete effectively for supply in the global LNG market, natural gas prices at the U.S. delivery points would have to increase to attract LNG deliveries. Location of import facilities is an important factor in the value of landed LNG. The United States appears more likely to be receiver-of-last-resort for LNG shipments in the near-to-mid term than to outbid Europeans, given the recent interruptions in Russian supplies. On the other hand, lack of storage in Europe and Asia may lead to continued U.S. receipts of LNG, even at relatively low prices, because new LNG export facilities serving the Atlantic Basin are expected to reach completion soon. EIA forecasts an increase of less than 20 Bcf of LNG for 2009 to 369 Bcf. In addition, an LNG import facility in eastern Canada largely focused on exporting to the United States was originally expected to enter service in 2008, but remains under construction. It may enter service in 2009. There are several trends under way in natural gas markets of interest to policy makers. They include: strong lower-48 onshore production a decrease in seasonal demand swings strong gas-for-power use changing international trade in LNG continuing progress in natural gas infrastructure development The natural gas supply picture for the lower-48 improved during 2008. Advances in unconventional gas production led to a 7.7% increase in lower-48 production, even though outer continental shelf (OCS) production lost almost 350 billion cubic feet due to hurricanes Gustav and Ike. The domestic supply has shifted from shallow Gulf of Mexico to deep Gulf of Mexico and unconventional sources in Texas, the Rocky Mountains and elsewhere. As new resources grow in importance, the need for increased gas leasing of on- and offshore federal lands is evolving. The U.S. natural gas reserve base has recently continued to increase. EIA reserves and production data indicate that the latest reserves-to-production ratio (2007) is 12.2, an increase from the prior year's ratio of 11.4 and 2000's ratio of 9.2. The Potential Gas Committee (PGC) is expected to release an assessment of the nation's natural gas supplies in the spring of 2009. This will provide an authoritative update on the natural gas supply situation for the United States. The PGC consists of more than 100 "voluntary experts" from industry, academia, and government. They are primarily geologists or engineers recruited because of their experience preparing resource estimates within their area. It was created in 1964 to address conflicting predictions of long term gas supply at that time. Consumption of natural gas in the United States remains highly seasonal for three major sectors, reflecting the importance of space heating; residential and commercial use of natural gas peaks in winter. Reflecting the importance of air conditioning load and the role of natural gas as the marginal fuel source for power generation, electric power use of natural gas peaks in summer. (Industrial use is relatively stable throughout the year.) Figure 4 illustrates that the combination of these seasonal patterns has led to a decrease in the overall seasonal swing and the development of a secondary peak in the summer due to gas-for-power use. Interestingly, some continue to call for more storage because of the growing consumption of natural gas, thinking that higher consumption levels require more storage volume. The decrease in the seasonal swing, however, through a decrease in the high month volume and an increase in the low month volume, means that less storage may be capable of serving the annual seasonal cycling needs of the U.S. markets. Those trading natural gas may want additional storage for arbitrage uses, but the fundamental needs related to system reliability may decrease somewhat with a decrease in the difference between minimum and maximum consumption rates. The secondary peak in gas for power was less in 2008 than in the previous years. This is explained by a decrease in the number of cooling degree days for summer 2008, ending a trend of increasing cooling degree days for several years. (See Table A -7 for data.) Another noteworthy seasonal feature observed by EIA was that as of 2007, natural gas price volatility was "considerably higher" in colder months than in other times. The pattern in 2008, however, appears contrary to this observation. From 2006 to 2007 deliveries to electric power customers increased by 615 Bcf, more than 45% of the consumption growth for the year. For the first time, electric power use of natural gas became the largest end use sector for natural gas. In 2008, gas-for-power use declined but this sector remained the largest gas user. The relative increase in electric generator use of natural gas during winter is also significant. In 2007, FERC's Division of Energy Market Oversight noted that November-March volumes increased 14% between winter 2005/06 and winter 2006/07. More recent data are not yet available. Industrial gas use in 2006 was approximately 13% lower than the 7,507 Bcf consumed in 2002. In 2007, industrial use increased by 2% over the 2006 level. In 2008, industrial gas increased about 0.3%. LNG monthly imports in 2008 varied from a high of 35.4 Bcf in August to a low of 22.8 Bcf in November. Because little of the LNG is imported under long term contracts, U.S. importers compete on the global LNG spot market for deliveries. In December 2008, European natural gas prices were in the $7.80-$9.50 per MMBtu range. New England citygates were at $10.06 per MMBtu and Henry Hub was at $8.85 per MMBtu. Thus, some import points could compete successfully in the global spot market for LNG and others could not. There is excess physical capacity at existing LNG import facilities to handle about ten times the imports of 2008. The North American natural gas industry has continued to add new infrastructure to the system. As noted in Table 4 and Table 5 , FERC identifies facilities that went into service in 2007 and 2008. These facilities appear responsive to serving fundamental market needs, such as new capacity from the growing production areas. Given the major economic shock to the energy markets during 2008, forecasts mean even less today than they usually do. In its Short Term Energy Outlook, EIA forecasts a 1% decrease in natural gas use for 2009, relative to 2008 because of weak economic conditions. A small increase in residential use will be offset by a larger decrease in commercial, industrial, and electric power demand. EIA forecasts increased U.S. production of less than 1%, primarily because of lower natural gas prices and decreased demands because of the economic downturn. EIA expects LNG imports to increase 20% in 2009, rebounding somewhat from the 42% drop in 2008. However, low summer demand in Europe could mean the United States will receive more LNG than forecast. EIA forecasts average Henry Hub prices to decrease roughly 35% in 2009, to $5.62 per MMBtu, due to weak economic conditions, increased U.S. production, and lower demand. EIA's forecast of natural gas prices depends on certain assumptions embedded in the forecast. These factors have uncertainty associated with them, as discussed next. Weather affects natural gas consumption through both the significant space heating loads in the residential and commercial sectors and the cooling load served by gas-fired power generation. EIA incorporates National Oceanic Atmospheric Administration (NOAA) weather forecasts in its short and long term forecasts. To the extent that actual heating degree days exceed the temperature scenario from NOAA, that will tend to increase demand for natural gas in the heating season and increase prices for natural gas during those periods. Similarly, if the actual cooling degree day requirements exceed those incorporated in the EIA scenario, then this will increase natural gas use in the cooling season via increased gas-fired power for air conditioning and increase the price for natural gas in the relevant cooling season. Natural gas prices and oil prices have long had a correlation. As the extent of oil/gas fuel switching has declined, this linkage has changed. For many years, the key relationship was between the delivered price of natural gas to New York and the price of alternative fuels (residual fuel oil, No. 6, or distillate fuel oil, No. 2). Historically, when natural gas prices in the northeast market area reached a price at which a significant industrial or utility load could save fuel costs by switching to a petroleum alternative, the users would switch fuel. This would limit the price to this alternative. There was a time when almost 1 trillion cubic feet of natural gas load could switch. As illustrated in Figure 5 , natural gas prices have generally been lower than either alternative fuel since the beginning of 2007. The exceptions have been limited periods of extreme cold in the Northeast. This suggests a delinkage in prices that may have resulted from environmental restrictions limiting the quantity of fuel-switchable load. The convergence of No. 6 oil and natural gas prices appears more likely to be due to oil prices falling more drastically than natural gas prices in the second half of 2008. Economic growth affects consumers' demand for natural gas and their ability to purchase it. EIA appears to have incorporated an economic outlook that expects less growth than in its recent forecasts. Given the relative stability in the residential and commercial sector consumption, the changed economic outlook would most likely affect industrial and power generation natural gas use most directly. Natural gas markets in North America continue to function well relative to other energy markets. Consumers and producers managed the tumultuous prices of 2008 without suffering major apparent damage. This market appears to continue responding appropriately to price signals. New pipelines and storage facilities have been built where price differentials have indicated need and value for these facilities. Current investment in LNG import capacity may prove excessive for the 2008-2009 heating season. There is the potential, given the higher prices in summer than in the heating season, that retail customers may face prices higher than spot prices because of risk management contracts signed by local gas utilities during the 2008 period of high prices. Weather and the overall economy remain important factors for natural gas demand and price levels. These factors remain uncertain and beyond human forecasting capability. Appendix A. Selected Statistics Appendix B. Acronyms

In 2008, the United States natural gas market experienced a tumultuous year, and market forces appeared to guide consumers, producers and investors through rapidly changing circumstances. Natural gas continues to be a major fuel supply for the United States, supplying about 24% of total energy in 2008. The year began with a relatively tight demand/supply balance, and this generated upward spot price movement. For the 2007-2008 heating season, the Energy Information Administration (EIA) reported a price increase of more than 30% (beginning to end of season). The key "benchmark" price for the United States, the Henry Hub spot price, generally rose through the first half of 2008 to a peak of $13.32 per million British thermal units (Btu) on July 3, 2008. By the end of 2008, the Henry Hub spot price had decreased 56% to $5.83 per million Btu, lower than the $7.83 per million Btu price on January 2, 2008. Closer to consumers, the EIA average citygate price increased 47% from January to $12.08 per million Btu in July and then decreased to $7.94 per million Btu as of December, a 2% drop from the start of 2008. Residential consumers saw a 68% increase through July and then a decline that had December 5% above January's average price. The supply outlook for the lower-48 states began a potentially important change in 2008. Onshore production in Texas and the Rocky Mountain region increased by 15%, especially because of the production of unconventional natural gas (e.g., deep shale gas). Noteworthy events in 2008: The national natural gas market experienced an unusual price pattern in the first half of the year, with EIA reporting average citygate (delivery area) prices lower than Henry Hub (supply area) spot prices. The normal pattern is the prices in delivery areas, which include transportation costs, are higher than supply area prices. Lower-48 onshore natural gas production increased 10% to reach more than 20.5 trillion cubic feet, a level not achieved since 1974. This production, along with other factors such as the weakened economy, appears to have prevented the 350 Bcf of lost gas production due to Hurricanes Gustav and Ike in the Gulf of Mexico from increasing prices. Liquefied natural gas (LNG) imports decreased 54% from the record level in 2007. Average use was less than 10% of reported capacity at operational LNG import facilities. The Federal Energy Regulatory Commission (FERC) approved another 2 Bcf per day of new import facilities in 2008. Gas for power use decreased 2.4% from 2007 and electric power remained the largest end use category for natural gas consumption for a second year. Going forward, current economic turbulence may contribute to natural gas market challenges, in terms of investment or attempts at market mischief. Vigilance in market oversight could grow in importance.

In September 2012, the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), the Tennessee Department of Health, and other state health departments began investigating a rare, non-contagious outbreak of fungal meningitis. As of June 3, 2013, 20 states had reported 745 infections (including fungal meningitis and other conditions), and 58 deaths were traced to injections of contaminated, preservative-free methylprednisone acetate produced by the New England Compounding Center (NECC). NECC, which self-identified as a compounding pharmacy - not a manufacturer - and was licensed by the state of Massachusetts, produced large volumes of drugs that were shipped across state lines to health care providers. Unlike traditional pharmacy practices, NECC produced drugs without individual prescriptions and made copies of existing commercially-manufactured drugs. These serious adverse events drew attention to compounded drugs (CDs). Six congressional hearings were held in 2012-2013 to understand the factors that led to these adverse events and ways to prevent future such incidents; these hearings are listed in Appendix B . In these hearings Members of Congress and stakeholders raised questions regarding how best to improve the safety of CDs while maintaining patient access to needed drugs. Issues raised at these hearings include the following: (1) what are CDs; (2) how are CDs made and by whom; (3) what is the role of CDs in health care delivery; (4) what are the federal and state roles in oversight of CDs; (5) how safe are CDs, and (6) what steps could be taken to prevent adverse events from CDs. This report provides background information about these issues that may be used to inform the policy discussion as Congress considers legislation. This report focuses on (1) available background information on CDs and compounding pharmacies; (2) changes in the role of CDs in healthcare delivery; (3) factors leading to an increase of compounding; (4) safety of CDs, including a table of selected publicly available adverse events; and (5) a brief summary of policy issues raised to date. This report includes material on CDs for human patients and does not include a discussion of veterinary drug compounding or the compounding of dietary supplements. Issues of public health and safety of CDs are tied to the regulation and oversight of CDs. This report includes brief information on federal, state, and professional efforts to increase the safety of CDs. Information on the federal regulation of CDs is addressed in other CRS reports: CRS Report R40503, FDA's Authority to Regulate Drug Compounding: A Legal Analysis , by Jennifer Staman, and CRS Report R43038, Federal Authority to Regulate the Compounding of Human Drugs , by [author name scrubbed]. Information on the regulation of commercially manufactured drugs can be found in CRS Report R41983, How FDA Approves Drugs and Regulates Their Safety and Effectiveness , by [author name scrubbed]. Compounding has been traditionally defined as a process where a pharmacist or a physician combines, mixes, or alters ingredients to create a medication tailored to the needs of an individual patient. Traditionally CDs are made in response to an individual prescription from a licensed health provider in the context of a pharmacist's and health care provider's professional relationship with a specific patient. CDs provide alternatives to standard commercially-manufactured drugs when such drugs do not meet the unique medical needs of a patient (e.g., due to a need for an allergen-free drug, weight-based dosing, or alternate modes of delivery), or are unavailable due to discontinuation, unavailability, or shortages. Shortages of sterile generic drugs and hospital outsourcing are cited as causes of increased the reliance of health care providers on CDs. Some have suggested that certain activities not traditionally associated with compounding be considered compounding. Such activities include the large-scale production of drugs to ease certain drug shortages, to meet outsourcing needs of hospitals, and to supply physician-administered drugs. Non-traditional compounding may include (1) the production and shipping of large volume of drugs across state lines; (2) production of drugs that are copies of FDA-approved commercially available drugs; (3) production of drugs outside of a personal relationship with a patient and without a prescription for an individual patient to receive a compounded version; and (4) providing products to third parties, such as hospitals, clinics, physician offices, and home health providers. These activities may be considered more akin to manufacturing than traditional compounding, which is considered part of the traditional practice of pharmacy. In this report, references to these types of activities will be called "non-traditional compounding." This report will be updated as necessary. Adverse events stemming from CDs in 2012 are the starting point for the current policy debate about existing regulatory oversight of CDs. The 2012 fungal meningitis outbreak was triggered by contaminated sterile CDs, injectable methylprednisolone, and was the worst recorded adverse event involving CDs, with news reports indicating that up to 14,000 individuals were exposed to this product. Contaminated sterile drugs pose the most serious threats to human health, and can cause death. Details on this event are listed in the following text box. The safety of CDs has been a concern of Congress for over two decades due to the expansion of non-traditional compounding. Potential safety risks for CDs include problems with potency (i.e., the dosage is inaccurate, either too strong or too weak), purity (e.g., the drug contains other chemicals that could be harmful), and contamination (the drug is contaminated with a bacteria, fungus, or virus). The FDA conducted surveys in 2001 and 2006 to assess identity, strength, quality and purity issues for CDs. In a non-random survey of compounded drugs available over the Internet, about one-third (33%) failed analytic testing, mostly regarding potency or uniformity of dosage. In these surveys, the rates of analytic testing failures for compounded drugs were higher than those for commercially-available drugs, where only 2% of drugs failed analytic testing. There is no specific federal or state requirement that an individual CD be tested for potency, purity, and sterility prior to being sold or administered. The compounder of a product may voluntarily perform such tests along with other quality control processes. Safety issues with CDs also have been found by state pharmacy boards. Certain states have started testing a certain percentage of compounded drugs for non-disciplinary purposes. For example, the State of Missouri Board of Pharmacy initiated a testing program in 2003 for compounded drugs and each year tests a certain number of finished products. Over the course of the testing program, 15% - 25% of the CDs were found to have problems with drug potency, ranging from a sub-potent drug with 0%--no active ingredient present--to a super-potent drug with almost 400% of the prescribed dosage. An inaccurate dose may present a risk of harm to the patient through a risk of toxicity (super-potent) or the risk of ineffective treatment (sub-potency) (see for example, Table C-1 , years 2010, 2007). The lack of resources to carry out testing of CDs appears to be a problem in several states. For example, a newspaper reported that Texas passed a law to provide for inspections of compounding pharmacies, but did not authorize funds for such purposes until 2007; once funded, testing dropped by two-thirds in 2012 compared to 2010 due to state budget cuts. There is no federal requirement for producers of CDs to report adverse events, so the actual number of individuals harmed by CDs is unknown. Policymakers have had concerns with CDs that date back almost two decades; these include reports of contamination of products that should be sterile, sub- or super-potent dosages, and impurities. Table C-1 provides a selected compilation of publicly available reports of adverse events involving CDs and other compounded medical products with details about the date, the number of states affected, the number of people affected, mortality (if any), drug involved, condition treated, and other characteristics, such as whether the product was shipped across state lines or was an off-label use. The vast majority of these adverse events involve sterile compounded products. Sterile compounded products include injectable drugs, IV-delivered drugs and solutions, inhalation drugs, and parenteral nutrition that are administered directly into the body and must be sterile to assure patient safety. There is no specific federal requirement for the reporting of adverse events with CDs; so that this information is by nature selective and cannot be used to draw inferences about the overall risks of CDs. Reports of incidents with CDs that do not rise to adverse events are excluded from the table. Table C-1 also includes other characteristics of CDs, including where it was evident that CDs were shipped across state lines, an element of non-traditional compounding and high-volume facilities, whether CD were prescribed for off-label uses, and whether a drug shortage was in effect. For example, a shortage of generic preservative-free methylprednisolone was reported by some sources prior to the 2012 fungal meningitis outbreak, which was caused by compounded versions of that drug. The 2012 fungal meningitis outbreak led to greater scrutiny by federal and state authorities of sterile CDs. In 2013, FDA and state authorities inspected certain facilities that produce sterile CDs and found a variety of safety concerns. Later, some, but not all, of these compounders issued product recalls due to sterility concerns. The next adverse event linked to a non-traditional compounding pharmacy occurred on May 24, 2013, when the FDA reported infections linked to contaminated sterile injectables; on May 28, 2013, the compounder recalled certain sterile products. Recalls of sterile CDs for 2013 are listed in the following text box. Traditional compounding is a process where a pharmacist or a physician "combines, mixes, or alters ingredients to create a medication tailored to the needs of an individual patient" in response to a prescription from a health care provider. CDs can include different formulations of drugs (e.g., liquid instead of tablet), doses, and certain ingredients (e.g., allergen-free, dye-free). This report will use the phrase "traditional compounding" to reference the historical use of the term compounding. CDs can provide patients drugs tailored to their individual health needs. The benefits of traditional compounding include (1) providing individualized drugs when commercially-produced drugs do not meet the health requirements of an individual patient; and (2) maintaining access to certain prescription drugs that are not commercially available due to shortages, unavailability, or discontinuation, among other factors. The number of CDs made cannot be determined due to the lack of publicly available information. Currently no federal reporting requirement exists for producers of CDs with respect to their compounding activities. The most recent attempt to assess the number of CDs was through a survey commissioned by the FDA in 2001. This report estimated that 650 pharmacies filled about 13 million prescriptions for compounded prescription drugs per year. Some stakeholders estimate that anywhere from 1-5% of all prescriptions filled annually are for CDs, but the basis of this information cannot be verified. There is also no publicly available information on the types of CDs made, for instance, the percentage of CDs that include dosage, formulation, or ingredient alterations, or that are produced in response to shortages of commercially-manufactured drugs. The lack of information on the current scope of compounding presents challenges for public health authorities and policy makers. Pharmacists, or technicians supervised by a licensed pharmacist, and physicians can produce CDs. Compounding is part of the standard practice of pharmacy and is within the scope of state licensure of pharmacists and pharmacies. The number of pharmacists engaged in compounding on a regular basis is difficult to evaluate due to a lack of publicly available information. The most recent attempt to survey pharmacists, commissioned by the FDA, found that the majority of compounded prescriptions are filled by a small number of pharmacies, and for some, CDs are the majority of their business. Others provide different estimates. Janet Woodcock, Director of the FDA Center for Drug Evaluation and Research (CDER), stated in a recent interview that 28,000 pharmacies compound drugs nationwide. The American Pharmacists Association (APhA), a trade association of pharmacists, reports that there are 7,500 pharmacies in the United States that specialize in compounding. The International Academy of Compounding Pharmacies, a trade association representing the compounding profession, has 2,700 members. As of January, 2013 there were 163 pharmacies in the United States accredited by the Pharmacy Compounding Accreditation Board, which offers a voluntary accreditation process for compounding pharmacies. Existing sources of publicly available information on specific CD products include those listed by compounding pharmacies on their websites, products described by professional associations, products mentioned in scientific journals, and on CDC and FDA websites due to warning and other notices. These CDs include, among others, drugs for: pain management (including alternate delivery, combined medications, dosage variations), hormone replacement therapies for women (including bioidentical hormones) and men (e.g., testosterone), men's and women's health, sports medicine, weight-loss, dental care, veterinary care, pediatric patients, and hospice care. Some compounded products include items advertised as treatments for Autism/ADHD, "adrenal fatigue," or fat-elimination; the FDA and others have raised questions regarding these claims. As noted earlier, some enterprises have engaged in certain activities not traditionally associated with compounding, but have asserted that these activities should be considered compounding. Such activities include the large-scale production of drugs to ease certain drug shortages, to meet outsourcing needs of hospitals and to supply physician-administered drugs. Non-traditional compounders make a variety of products, including sterile injectables, parenteral nutrition, and drugs on the FDA shortage list. Sterile injectable CDs include epidurals (for childbirth and pain management), nerve-blocking agents, drugs for pain management, and antibiotics. Individuals might receive these products in a hospital, doctor's office, or other medical facility as a medication, an IV solution or nutrition. Some non-traditional compounders have large numbers of customers. For example, PharMedium, a large scale compounder, reported 2,300 hospital customers for a variety of compounded products. NECC, the compounder involved in the fungal meningitis outbreak of 2012, was listed on a FDA website as having over 20,000 customers, including physicians, clinics, and hospitals. Drug compounding has historically been the focus of state governments through their regulation of pharmacies. Recently questions have arisen regarding the extent the federal government can regulate the practice of compounding through the FFDCA. This section discusses federal and state authorities, as well as industry self-regulation. Federal authority over compounding largely stems from the Federal Food Drug and Cosmetics Act (FFDCA), enacted in 1938, and its subsequent amendments, including the Food and Drug Administration Modernization Act (FDAMA) of 1997, which added compounding-specific provisions to the FFDCA in Section 503A. Litigation over Section 503A's advertising provisions has created doubt, however, over the legal effect of FDAMA's compounding provisions. The precise limit to federal authority with respect to drug compounding remains uncertain as the federal authority to regulate traditional drug compounding has been discussed by very few courts, and each court that has approached the issue did so from a unique factual setting that colored the eventual outcome of the case. Courts appear to agree that the federal government can regulate compounding activity that is akin to manufacturing (i.e., non-traditional compounding), and courts have afforded deference to the FDA's interpretation of when a compounder is acting like a manufacturer, which appears to be within the FDA's discretion. However, there is not a bright-line distinction between behaviors that are "akin to manufacturing" and those of a traditional compounding pharmacy. As a result, uncertainty remains regarding the possible limits to the FDA's current authority to regulate traditional compounding practices. Even assuming that FDA has the authority to regulate traditional compounding, as a matter of policy, the FDA has generally declined to test the current limits of its authority to regulate compounding, preferring instead to defer to state governments with respect to the regulation of "traditional compounding." Traditional compounding is a component of the practice of pharmacy and has typically been regulated by the states as "part of their regulation of pharmacies" and the licensing of pharmacists as health care professionals. There is great variety in existing state legislation addressing CDs. Certain states have passed new laws, or are considering revisions of laws and regulations for compounding pharmacies, in part due to recent events. The National Association of Boards of Pharmacies (NABP) has listed summaries of approved and proposed state changes to permitted compounding practices. State boards of pharmacy evaluate pharmacists and pharmacies on compounding practices and facilities. Compounding from bulk ingredients is generally an approved part of pharmacy practice, with some states requiring all licensed pharmacies to offer compounding services. Some states follow NABP model language and permit a pharmacist to compound drugs to patients only upon receipt of a valid prescription from a doctor or other medical practitioner licensed to prescribe medication. Some states require a special license for compounding sterile medications, which requires special facilities and adherence to sterile methods. Other states license a separate class of pharmacy facility that produces drugs for pharmacies or other providers, such as central fill pharmacies. Finally, some states permit pharmacies to make exact copies of commercial products in response to discontinued products or drug shortages. Professional programs in pharmacy are accredited and pharmacists generally receive formal education and professional training with respect to the practice of compounding drugs. Pharmacists can participate in a voluntary accreditation process for compounding established by professional pharmacy organizations, and the U.S. Pharmacopeial Convention (USP). As of December 2012, 163 facilities nationwide have this accreditation. Professional standards and guidelines for CDs are established by the USP in published standards: Chapter 797 "Pharmaceutical Compounding - Sterile Preparations" for sterile products and Chapter 795 "Pharmaceutical Compounding - Non-Sterile Preparations." USP Standard 797 includes standards for facilities, procedures, and staff in order to produce safe sterile drugs, such as sterilizing equipment, a sterile clean room, special ventilation, and decontamination processes. Not all pharmacies or compounders adhere to these USP standards and these standards, unless required by state law, are voluntary. To date, 20 states have laws that require full adherence to USP Standard 797. USP standards are designed for pharmacy compounding and may not be suitable for large-scale production of CDs. Commercial production of drugs is addressed by the current good manufacturing practices (cGMP) required by Section 501 of the FFDCA for commercial manufacturers; cGMP requires certain manufacturing practices as well as adverse event reporting. Some believe that the number and types of CDs and other products (IV and parenteral nutrition) are increasing, coinciding with increasing demand for certain compounded products due to a variety of reasons, including (1) an increase in hospital outsourcing of CDs; (2) drug shortages, unavailability, and discontinuation of FDA-approved drugs; (3) interest in individualized products by physicians and consumers; and (4) an increased interest by pharmacists in new markets. As noted earlier, the exact number of business facilities engaged in non-traditional compounding is unclear. In 2013, the FDA inspected non-traditional compounding facilities that were engaged in sterile compounding and lists 39 facilities that it inspected located around the country. Some of these facilities, such as Central Admixture Pharmacy Services and PharMEDium Services have multiple locations. Press and other sources indicate growth of centralized compounding facilities that provide outsourcing and related activities to pharmacies and hospitals. Some of these compounding facilities include compounding pharmacies, central fill pharmacies, and outsourcing pharmacies. Some states, but not all, permit certain types of consolidated services, such as "shared services" or "central fill IV pharmacies," which make products for distribution among a variety of providers. For example, Med Prep Consulting, Inc. lists itself as a state-licensed central fill pharmacy and provides products to other pharmacies. Hospitals commonly compound drugs, IV solutions, and IV nutrition. For example, children's hospitals compound a variety of products such as pediatric dosages or products that are not commercially available. One source reports that increases in use of drugs dosed by weight, rather than in commercially-available dosing, and the expansion of treatment of disorders that require personalized dosing have led to a growth of hospital-based compounding. Trends in health care include increasing hospital consolidation and integration of hospitals, leading to consolidated purchasing and centralized production, including the production of CDs. For example, the Cleveland Clinic Health System, a network of 10 hospitals and 15 pharmacies, reported that in 2012, approximately 870,000 doses were compounded at its central facility. Cleveland Clinic reported that 56% of its products were compounded for the needs of specific patients; 44% were made in anticipation of patient needs in a large hospital, such as the preparation of syringes used in the operating room, epidurals, narcotic infusions, doses not commercially available, and medications that were unavailable due to drug shortages. Smaller facilities in rural areas may increase the outsourcing of CDs due to need for specialty intravenous products without the facilities to produce such products. Reductions in staff or insufficient staff or facilities to continue compounding; streamlining workflow; and cost savings may also be factors related to outsourcing by facilities. As noted earlier, there is limited information on the numbers of outsourced compounded products, as the records of compounding entities are not publicly reported. However, a 2013 report of the Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) on outsourcing of sterile products by hospitals found that 25% used "high-risk" sterile products, those made from non-sterile ingredients, while 92 % of hospitals used compounded sterile products that were not "high-risk". The reasons hospitals provided for outsourcing sterile compounded products include drug shortages and their lack of capacity to produce products that remained stable over time and thus had a long shelf-life. Stability and extended shelf-life permit hospitals to store products for use as patient needs emerge. Shortages were cited as a reason for outsourcing by 62% of hospitals, as were stability (69%) and extended shelf-life (62%). Shortages of commercially-available drugs, especially shortages of generic sterile products, play a central role in the increased demand for CDs. The drug shortages may be temporary or permanent and are due to a variety of factors including voluntary discontinuation of products, supply chain problems, and production issues, including safety problems at commercial manufacturers. Certain compounders advertise their ability to fill certain back-ordered drugs or those in short supply on their websites. Shortages of commercially-manufactured drug are predicted to continue, leading to continued demand for certain compounded products. Physicians, hospitals, and other health care providers may turn to compounders to meet a time-sensitive need when specific drugs may be temporarily unavailable. A 2013 report by the Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) surveyed hospitals participating in Medicare and found that many hospitals turn to compounding pharmacies to provide drugs to maintain supply due to shortages of commercially-manufactured FDA-approved drugs. According to the OIG report, 68% of hospitals indicated that they sought a CD due to a drug shortage. The FDA and other safety advocates are concerned because reportedly 73% of drug shortages are for sterile injectable generic drugs, which are some of the most difficult drugs to compound safely. Several generic commercial manufacturers have struggled with manufacturing problems that have led to interruptions in supply of sterile generic drugs. For example, as of May 15, 2013, a major generic manufacturer in this business sector, Hospira, has recalled eight different sterile injectable drugs for 2012 and 2013. An alternative to sterile injectable CDs and generics are brand-name sterile injectables. These are less likely to be in short supply or suffer from quality problems; however, brand-name sterile drugs usually cost more than generic or compounded products. Recalls of products from compounding pharmacies may also exacerbate drug shortages. Ameridose and NECC ended production of certain sterile drugs in 2012-2013 due to problems with sterility, and these drugs were already in short supply. In 2013, compounders recalled certain products produced at these facilities; some of these products were drugs listed on the FDA shortages website. For example, drugs recalled by Med Prep in March 2013 include drugs on the FDA Current Drug Shortage Index. CD shortages heighten problems of patient access to commercially-manufactured generic drugs when there are shortages. Table 1 details the perceptions of hospitals about the effect of disruptions in supply of sterile products from compounding pharmacies. Almost 50% of respondents perceived that health care delivery would be seriously impacted, while 11.5% perceived that the effect on patient health would be life-threatening. A growth of interest in customized products, including allergen-free drugs, single administration of multiple drugs, and individualized formulations of drugs (such as liquids instead of tablets) may play a role in heightened demand for CDs. The sources of this demand include physician and patient demand as well as changing pharmacist business models. There appears to be an increase in marketing of CDs for treatment of common disorders, such as menopausal symptoms (e.g., "bio-identical" hormones), men's health, and weight loss, which may lead to an increase in demand for these CDs. Compounding may provide pharmacists alternatives to expand business growth. Pharmacy publications have emphasized how compounding pharmacists improve their own professional satisfaction through providing more individualized services and increased engagement with patients. This reflects an evolution to business models that expand pharmacist roles in areas of patient care beyond distributing commercially-manufactured products. A 2012 article in Business Week describes drug compounding as a growing business sector, and describes how focusing on compounding can provide a new market niche for community pharmacies. Some of these pharmacies may be exploring new business models due to increased competition with chain pharmacies and retailers to fill prescriptions for commercially-manufactured drugs. This account appears consistent with material on certain compounding pharmacies' websites that describe business development from community pharmacies into a market niche in compounded products (both prescription drugs and dietary supplements). Demand may be generated in part by off-label prescribing by physicians for a variety of reasons, including drug prices and shortages. As Table C-1 indicates, some of the incidents of contamination and adverse events are for CDs prescribed for off-label uses. Off-label prescribing allows physicians flexibility to prescribe medications they feel are necessary for patient health. Off-label use of a CD may present additional, but unknown risks. For example, two common off-label uses of sterile CD are a compounded version of a chemotherapy drug, Avastin, for use to treat macular degeneration, and preservative-free methylprednisolone for back pain. There have been recent adverse events with compounded Avastin, the main appeal of which is its lower price compared to FDA-approved drugs to treat macular degeneration (see Table C-1 , 2011). Preservative-free methylprednisolone is used to treat back pain (see Table C-1 , years 2013, 2012, 2002, 2001). Compounded versions of this drug by NECC were the cause of the 2012 fungal meningitis outbreak. The processes for creating sterile CDs require special equipment, facilities, and personnel training. When compounding exclusively with sterile ingredients, sterility must be maintained in all phases of production; when compounding with non-sterile ingredients, sterility must be achieved for the finished product requiring a sterilization process or related procedure that does not affect product stability. Regulators and industry agree that the highest risk to patient safety is from those sterile products made from non-sterile ingredients. Consumers, pharmacists, pharmacy compounders, hospitals, Congress, and state and federal regulators all have a stake in access to, and safety of, needed drugs. Increasing demand for CDs by patients and providers, drug shortages, consolidation of hospital services and other factors have led to changes in health delivery. The potential risks to public health of product failures have increased as non-traditional compounding has expanded. Given the expansion of sterile compounding, balancing patient access to CDs with patient safety has become more complex. Thus, some stakeholders believe that changes in business trends, such as drug shortages and outsourcing of compounding, must be taken into consideration in considering changes in professional standards and federal and state oversight and regulation of CD. Three issues have emerged in the congressional hearings about CDs and in legislation introduced in the 112 th and 113 th Congress (see Table A-1 ): (1) adverse event reporting, (2) labeling, and (3) modifying federal oversight of non-traditional compounding. These issues will be discussed in the following section. There is a lack of publically available information on the number and types of adverse events involving compounded drugs, as there is no requirement that compounders report adverse events to federal authorities, and state requirements vary. Adverse event reporting is not required by federal regulators for producers of CDs as it is for prescription, non-prescription drugs, and dietary supplements. Without knowing the total number of compounded products made, as well as the total number of adverse events, it is difficult to ascertain the overall safety of CDs or to understand the benefits and risks of using CDs. The publicly-available information on CDs is published by public health authorities, FDA inspections of facilities listed on websites, records of state licensing boards, and reports in professional journals documenting adverse events. Adverse events can be voluntarily reported to the FDA MedWatch database, but without mandatory reporting, the completeness of the information cannot be ascertained. Labeling specifying that a drug or another product is compounded is not a universal requirement. Due to the complexity of the supply chain and the growth of non-traditional compounding, patients and providers may not realize that a drug has been compounded. Unlike traditional compounding where a patient is given a prescription by a physician for a CD, non-traditional CDs are not necessarily identified as compounded. Given the potential benefits and risks of CDs, an argument could be made for providing patients this information as part of informed consent for medical treatment. Informed consent for treatment is an ethical and a legal requirement to ensure that a patient fully understands the potential risks and benefits of a medical procedure. CDs and other compounded solutions pose potential risks and benefits that may be different from commercially-manufactured products. Informed consent is based on a patient's knowledge and understanding of a medical procedure; as most patients assume that drugs are commercially-manufactured, this additional information could be seen as necessary to the ethical pursuit of informed patient consent. Policymakers have raised questions regarding how best to improve the safety of CDs while maintaining patient access to needed medications, including the need for new legislation and increased accountability. In testimony to Congress, FDA administrators have expressed reservations about non-traditional compounding activities that are akin to manufacturing (i.e., non-traditional compounding) and their potential risks to public safety. The FDA recommends increased federal oversight of sterile compounding and certain other high-risk activities. Attempts to clarify federal authority over non-traditional compounding is represented in certain elements of bipartisan legislation of the Senate Committee on Health, Education, Labor and Pensions (HELP) and in legislation introduced in the 112 th and 113 th Congress. These proposals all include increased clarity in the federal oversight role for compounding drugs. For example, a provision in the draft HELP legislation would create new authorities for FDA oversight of "compounding manufacturers" (i.e., non-traditional compounders) (see Table A-1 ). Some Members of Congress argue that new FDA authorities should await better implementation of existing authorities. For example, a House Committee on Energy and Commerce report questions whether a lack of enforcement by FDA and state authorities of certain vendors is an issue. The report cites safety violations at NECC in prior years, which do not appear to have been resolved despite FDA involvement. Some in the compounding pharmacy industry believe that the current safety issues are isolated to certain vendors and that compounding, in general, is not unsafe. Some compounding associations have reservations about the FDA having new authorities; others support increased FDA oversight. Many acknowledge that compounded health care products have become more complex and health delivery more complicated. In a recent report, the Association of Health-System Pharmacists (AHSP) and American Hospital Association (AHA) noted that there was general support from stakeholders in these associations for (1) FDA oversight of certain non-traditional compounding pharmacies (e.g., providing a CD without a prescription and shipped over state lines); (2) improved communication between state and federal regulators; (3) a list of "do-not-compound" CDs; and (4) improved access to USP compounding monographs that provide guidance to compounders on making certain CDs. Appendix A. Legislation Introduced in the 113 th Congress Affecting Drug Compounding The following table summarizes selected provisions of the two pieces of legislation on compounding introduced to date in the 113 th Congress. It includes provisions that address issues discussed in this report, but it does not provide a full summary of the legislation. Appendix B. Congressional Hearings on CDs 2012-2013 (in Reverse Chronological Order) "Examining Drug Compounding," hearing of the Subcommittee on Health of the Committee on Energy and Commerce, U.S. House of Representatives, May 23, 2013. Executive Session, S. 959 Pharmaceutical Compounding Quality and Accountability Act, hearing of the Committee on Health, Education, Labor, and Pensions, U.S. Senate, May 22, 2013. Ordered to be reported with an amendment in the nature of a substitute favorably. "Pharmaceutical Compounding: Proposed Legislative Solution," hearing of the Committee on Health, Education, Labor, and Pensions, U.S. Senate, May 9, 2013. "A Continuing Investigation into the Fungal Meningitis Outbreak and Whether It Could Have Been Prevented?", hearing of the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, U.S. House of Representatives, April 26, 2013. "Pharmacy Compounding: Implications of the 2012 Meningitis Outbreak," hearing of the Committee on Health, Education, Labor, and Pensions, U.S. Senate, November 15, 2012. "The Fungal Meningitis Outbreak: Could It Have Been Prevented?", hearing of the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, U.S. House of Representatives, November 14, 2012. Source : House Committee on Energy and Commerce: http://energycommerce.house.gov/hearings ; Senate Committee on Health, Education, Labor and Pensions: : http://www.help.senate.gov/hearings/ . Appendix C. Selected Adverse Events Involving Compounded Drugs and Solutions

Compounding has been traditionally defined as a process where a pharmacist or a physician combines, mixes, or alters ingredients to create a medication tailored to the needs of an individual patient. Traditionally compounded drugs (CDs) are made in response to an individual prescription from a licensed health provider in the context of a pharmacist's and health care professional's relationship with a specific patient. Some have suggested that certain activities not traditionally associated with compounding be considered compounding. Such activities include the large-scale production of drugs to ease certain drug shortages, to meet outsourcing needs of hospitals, and to supply physician-administered drugs. Non-traditional compounding may include (1) the production and shipping of large volume of drugs across state lines; (2) production of drugs that are copies of FDA-approved commercially available drugs; (3) provision of CD without a prescription for an individual patient to receive a compounded version and outside of a professional relationship; and (4) production of products to third parties, such as hospitals, clinics, physician offices, and home health providers. These activities could be considered more akin to manufacturing than traditional compounding, which is considered part of the traditional practice of pharmacy. Adverse events involving contaminated compounded drugs have drawn attention to the growing use of non-traditionally compounded drugs in health care delivery. Shortages of sterile generic drugs and hospital outsourcing are cited as causes of increased numbers of CDs produced by non-traditional compounders. Efforts to assess the risks and benefits of CDs on public health and safety are complicated by the lack of publicly available information, including the absence of a federal adverse event reporting requirement, and the lack of information about the number of drugs compounded, the types of drugs compounded, and the number of businesses in this market. Policymakers have raised questions regarding how best to improve the safety of CDs while maintaining patient access to needed medications. Drug compounding has historically been the focus of state governments through their regulation of pharmacies. Recently questions have arisen regarding the extent to which the federal government can regulate the practice of compounding through the Federal Food, Drug, and Cosmetic Act (FFDCA). Policy discussions include proposals to clarify federal oversight of high-risk activities and products, to improve federal and state coordination, and to increase use of existing federal authorities. This report provides background information on CDs and non-traditional compounding pharmacies relevant to policy discussions. This includes an overview of the 2012 fungal meningitis outbreak, recent safety alerts and recalls of compounded drugs, definitions of traditional compounding and non-traditional compounding, information on the CDs produced and by whom, information on the demand for non-traditional compounding, including the role of shortages of sterile injectable drugs, hospital out-sourcing, and patient and provider demand, and information on adverse events involving compounded drugs.

Health care Flexible Spending Accounts (FSAs) are employer-established benefit plans to reimburse employees for specified health care expenses as they are incurred. They arose in the 1970s as a way to provide employees with a flexible benefit at a time when the cost of health care was a growing concern. In contrast to traditional insurance plans, FSAs generally allow employees to vary benefit amounts in accordance with their anticipated health care needs. FSAs can be used for unreimbursed medical expenses, and contributions to FSAs have tax advantages. However, FSA contributions are generally forfeited if not used by the end of the year, although employers may extend the deadline for using unspent balances up to 2 1/2 months after the end of the plan year (i.e., March 15 for most plans). This report describes FSAs, the basis for their tax treatment, and data on their use. It also includes a discussion of the changes made to FSAs by the Patient Protection and Affordable Care Act (ACA). FSAs are employer-established benefit plans that reimburse employees for specified expenses as they are incurred. They usually are funded through salary reduction arrangements under which employees receive less take-home pay in exchange for contributions to their accounts. Employees each year choose how much to put in their accounts, which they may use for dependent care, adoption assistance, or for medical and dental expenses. However, there must be separate accounts for these three purposes, and amounts unused at the end of the year must be forfeited to the employer. If FSAs meet these and other rules, contributions are not subject to either income or employment taxes. The focus of this report is on the FSAs devoted to health care. To illustrate the tax savings, consider a health care FSA funded for an employee through a salary reduction arrangement. Before the start of the year, the employee elects to reduce his salary by $75 a month in exchange for contributions of that amount to the FSA. Other employees might choose to contribute more or less than $75. Throughout the year, as the employee incurs medical and dental expenses not covered by insurance or other payments, he may use funds in the account to pay them. His total draw, which must be available at the start of the year, is limited to $900 (the sum of his monthly contributions for the year). If all $900 is used the first nine months, for example, he cannot replenish the account until the next year. Any amount that remains unspent at the end of the year (or after the 2 1/2 month extension, if available) is forfeited to the employer. If the FSA was funded by the employer, as sometimes is the case, the employee's draw must similarly be available at the start of the year. It is possible for FSAs to be funded both by salary reductions and employer contributions. If the employee were in the 25% tax bracket, the federal income tax savings from the $900 salary reduction used to fund the account generally would be $225 (i.e., $900 x 0.25); in addition, the employee could save $69 in Social Security and Medicare taxes (i.e., $900 x .0765). There could be state income tax savings as well. If the employee were in the 15% tax bracket, the federal income tax savings would be $135, three-fifths as large, while if he were in the top 35% bracket they would be commensurately greater, $315. The employer would also save $69 in employment taxes from the $900 salary reduction. Employers often use these savings to help pay the expenses of administering an FSA. Tax savings can exceed losses due to forfeiture of a remaining balance at the end of the year; thus, not all of an account must be used for employees to come out ahead financially. Since tax savings are greater in the higher tax brackets, higher income employees may be less concerned about forfeitures (assuming they recognize they could still be better off) than lower income employees. The tax savings associated with a health care FSA are not unlike those for traditional comprehensive health insurance, which also allows employer payments to be excluded from the income and employment taxes of the employees as well as from the employment taxes of the employer. FSAs are one way that employment benefits can be varied to meet the needs of individual employees without loss of favorable tax treatment. Flexible benefit arrangements generally qualify for tax advantages as "cafeteria plans," under which employees choose between cash (typically take-home pay) and certain nontaxable benefits (in this case, reimbursements for health care expenses) without paying taxes if they select the benefits. The general rule is that when taxpayers have an option of receiving cash or nontaxable benefits they are taxed even if they select the benefits; they are deemed to be in constructive receipt of the cash since it is made available to them. Section 125 of the Internal Revenue Code provides an express exception to this rule when certain nontaxable benefits are chosen under a cafeteria plan. FSAs and cafeteria plans are closely related, but not all cafeteria plans have FSAs and not all FSAs are part of cafeteria plans. FSAs are considered part of a cafeteria plan when they are funded through voluntary salary reductions ; this exempts the employee's choice between cash (the salary subject to reduction) and normally nontaxable benefits (such as health care) from the constructive receipt rule and permits the latter to be received free of tax. Thus, instead of receiving a full salary (for example, $30,000), the employee can receive a reduced salary of $29,100 with a $900 FSA contribution and will need to treat only $29,100 as taxable income. However, if FSAs are funded by nonelective employer contributions then their tax treatment is not governed by the cafeteria plan provisions in Section 125; in this situation, the employee does not have a choice between receiving cash and a normally nontaxable benefit. Instead, the benefits are nontaxable since they are directly excludable under some other provision of the Code. For example, nonelective employer-funded FSAs for dependent care are tax-exempt under Section 129, while nonelective employer-funded FSAs for health care are tax-exempt under Sections 105 and 106. Regardless of how they are funded, rules regarding FSAs are not spelled out in the Internal Revenue Code; rather, they were included in proposed regulations that the Internal Revenue Service (IRS) issued for cafeteria plans in 1984 and 1989. Final rules regarding circumstances in which employers may allow employees to change elections during a plan year were issued in March 2000 and January 2001. To be exempt from the constructive receipt rule, participants must not have cash or taxable benefits become "currently available"; they must elect specific benefits before the start of the plan year and be unable to change these elections except under specified circumstances. With respect to health care FSAs, the maximum amount of reimbursement (reduced by any benefits paid for covered expenses) must be available throughout the coverage period; coverage periods generally must be 12 months (to prevent employees from contributing just when they anticipate having expenses); reimbursements must be only for medical expenses allowable as deductions under Section 213 of the Code; claims must be substantiated by an independent third party; expenses must be incurred during the period of coverage; after year-end forfeitures, any "experience gains" (the excess of total plan contributions and earnings over total reimbursements and other costs) may at the employer's discretion be returned to participants or used to reduce future contributions, provided individual refunds are not based on participants' claims; and health care FSAs must exhibit the risk-shifting and risk-distribution characteristics of insurance. The effect of the IRS rules is to allow only forfeitable FSAs under which employees lose whatever they do not spend each year. The rules disallow three other types of FSAs that had started to spread before 1984: benefit banks , which refunded unused balances as taxable compensation at the end of each year; ZEBRAs , or zero-based reimbursement accounts, under which reimbursements were subtracted from salaries each month (thus reducing taxable compensation at the time it was paid); and ultimate ZEBRAs , under which salaries already paid were recharacterized at the end of the year into reimbursements and taxable compensation. Neither ZEBRAs nor ultimate ZEBRAs had accounts that were funded, and they were criticized as abusive arrangements. In August 2007, the IRS issued new proposed rules for cafeteria plans that have not been finalized. The proposed rules generally preserve rules set out in regulations from 1984 and 1989 that were also never finalized. The new rules also reflect changes in tax law from the past 20 years. One key area of the proposed rules is detailed requirements for nondiscrimination testing. Nondiscrimination testing measures whether a plan disproportionately favors highly compensated employees. All cafeteria plans will have to comply with these rules even those that currently do not undertake such testing. The August 2007 proposed rule, however, has not yet been finalized. The IRS rules lay out what is permissible with respect to FSA plans, but employers may add their own requirements. For example, prior to ACA, the IRS did not limit the amount that an employee can be reimbursed through a health care FSA, but employers established their own ceiling. (One reason they might do so is to limit the financial risk that employees might resign having received reimbursements that exceed their contributions.) Employers may exclude certain elective expenses from their plans. Beginning in 2013, however, ACA will limit contributions to FSAs to $2,500, which will be adjusted for inflation in subsequent years. FSAs can provide tax savings for the first dollars of health care expenditures that people have each year, similar to the tax savings associated with comprehensive insurance plans having negligible deductibles and copayments. However, taxpayers normally are allowed to deduct out-of-pocket medical expenses only to the extent they exceed 7.5% of adjusted gross income, and then only if the taxpayer itemizes deductions. The more favorable treatment for FSAs might be justified since participants generally assume additional financial risk for their health care. Some might question, however, whether the savings are proportional to the risk and whether they are equitable among people of similar incomes. Few surveys ask about FSAs, and those that do obtain only limited information. The two surveys that are available report different measures of access. The first survey from the Bureau of Labor Statistics (BLS) reports the percent of workers who have access to health care FSAs. According to the BLS survey, 39% of all workers in 2010 had access to a health care flexible spending account. When viewed by firm size, 56% of workers in firms with more than 100 workers had access to one. The accounts were not as common for workers in small businesses. In establishments with fewer than 100 employees, 20% of the workers had access to a health FSA. The second survey from Mercer reports the share of employers offering FSAs . According to the Mercer Employer Benefit Survey, more than four-fifths of large employers (85%) offered a health care FSA to their employees in 2009. Among small employers (those with less than 500 employees), 29% offered a health care FSA. The federal government began to offer FSAs to its employees in July 2003. As of September 2008, there were about 240,000 federal health care FSAs. Despite high percentage of employers offering FSAs, the average participation rate among employees has been much lower. According to the Mercer Survey, 37% of employees offered an FSA chose to participate in 2009. The average annual contribution was $1,420. Reasons for low FSA participation include employee perceptions of complexity, concerns about end-of-year forfeitures, and limited employer encouragement. Younger employees, particularly if single, may not have enough health care expenses to make participation worthwhile. For lower income employees, the tax savings may be inconsequential. Eligibility for FSAs is limited to employees whose employers offer plans; people who are self-employed or unemployed generally cannot participate. However, former employees can be eligible provided the plan is not established predominantly for their benefit. Employers may set additional conditions for eligibility. FSAs allow coverage of a spouse and dependents. FSAs do not have to be linked with any particular type of insurance, though it is said some employers establish FSAs in order to win employee acceptance of greater cost-sharing in plans with higher deductibles. FSA contributions may be made by employers (through nonelective payments), employees (through salary reduction plans), or both. FSA contributions occur during the plan year, which is usually a calendar year. Because most FSAs are funded through salary reductions, contributions typically occur pro-rata throughout the year. The IRS imposes no specific dollar limit on health care FSA contributions, though plans typically have a dollar or percentage maximum for elective contributions made through salary reductions. Employers set limits to reduce losses from employees who quit or die when their withdrawals (which might total the year's allowable draw) exceed their contributions from salary reductions. For 2008, each federal employee may contribute up to $5,000 to his or her health care FSA. Beginning in 2013, contributions to FSAs will be limited to $2,500, and adjusted for inflation in subsequent years. Under IRS guidelines, health care FSAs can be used for any unreimbursed (and unreimbursable) medical expense that is deductible under Section 213 of the Internal Revenue Code, with several important exceptions. One exception disallows their use for long-term care and for other health insurance coverage, including premiums for any employer plan. Prior to 2011, there was a second exception for FSAs to cover nonprescription drugs. However, beginning in 2011, over-the-counter medications (except those prescribed by a physician) are no longer considered a qualified medical expense. Employers may add their own limitations. The restriction against paying health insurance premiums can be circumvented if the employer offers a separate premium conversion plan. This arrangement allows employees to pay their premiums through what are deemed to be pre-tax salary reductions. For example, if employees pay $600 a year for health insurance (with their employer paying the balance), their payment can be considered to be made directly by their employer (and so exempt from income and employment taxes) instead of included in their wages (and so taxable). Premium conversion plans are common among businesses that offer health insurance, particularly among large companies. The federal government implemented a premium conversion plan in October 2000. FSA funds may be used only for qualifying expenses, as defined above; they generally cannot be withdrawn for other purposes. To ensure compliance, reimbursement claims must be accompanied by a written statement from an independent third party (e.g., a receipt from a health care provider). One exception to the rule prohibiting nonqualified withdrawals is that military reservists called to active duty for at least 179 days or for an indefinite period may receive some or all of the unused funds in their account. Employers are permitted but not required to allow these withdrawals. Historically, FSA balances unused at the end of the year were forfeited to the employer; they could not be carried over. On August 23, 2004, Senator Grassley, then chairman of the Senate Committee on Finance, requested the Treasury Department to assess whether it had the authority to modify the "use or lose it" rule without a directive from the legislative branch. On December 23, 2004, Treasury Secretary John W. Snow responded by letter that Congress had effectively ratified the rule and that changes would require legislative action. Nonetheless, on May 18, 2005, the IRS issued a notice that employers may extend the deadline for using unspent balances up to 2 1/2 months after the end of the plan year (i.e., until March 15 for most plans). FSAs are still subject to the "use it or lose it" rule; however, the notice allows employers to offer access to the FSAs for up 14 1/2 months instead of 12 months. The rationale for the new notice is based on other benefits covered under the section of the Code dealing with cafeteria plans, Section 125. Cafeteria plans may not include a benefit that defers compensation, which is the basis of the "use it or lose it" rule. However, according to the new notice, payment from a plan is not considered deferred compensation even if the payment occurs after the end of the plan year if that payment occurs within "a short, limited period" after the end of the plan year. The notice cites other regulations and rulings stating that benefits are not considered deferred if they "are received by the employee on or before the fifteenth day of the third calendar month after the end of the employer's taxable year [that is, March 15].... Consistent with these other areas of tax law, Treasury and the IRS believe it is appropriate to modify the current prohibition on deferred compensation in the proposed regulations under SS125 to permit a grace period after the end of the plan year during which unused benefits or contributions may be used." The employer has the option to offer this 2 1/2-month grace period but is not required to do so. For implementation, the cafeteria plan document must be amended to include a grace period, and the period must apply to all participants in the plan. The IRS notice does not alter other features of FSAs, so at the end of the applicable grace period, unused balances still must be forfeited to the employer. Employers' initial reaction to the rule change has been mixed, with some welcoming the added flexibility but others concerned about additional administrative burdens and exposure to increased financial risk. The Tax Relief and Health Care Act of 2006 ( P.L. 109-432 ) provided that individuals may make limited, one-time rollovers from balances in their FSAs to Health Savings Accounts (HSAs). IRS guidance issued in February 2007 provides details about the conditions under which these transfers can occur. Among other things, employees must elect to make "qualified HSA distributions" by the last day of the plan year, no reimbursements can be made to employees after that last day, and the HSA distribution cannot exceed the lesser of the balance in the FSA on (1) September 21, 2006, or (2) the date of the distribution. It is possible for individuals to have a health care FSA along with other tax-advantaged health accounts--HSAs and Health Reimbursement Accounts (HRAs). However, employers must coordinate how multiple accounts are used so that the eligibility requirements are not violated. Health care FSAs cannot be used to pay the deductible of an HSA's qualifying high deductible health insurance. As a result, the FSA for those with an HSA must be either a "limited purpose FSA" or a "post-deductible FSA." A limited purpose FSA is one that pays only for preventive care and for medical care not covered by the HSA's qualifying health insurance (for example, vision and dental care). A post-deductible FSA is one that does not pay or reimburse any medical expense until the deductible of the HSA's qualifying health insurance has been met. For those enrolled in an HRA and FSA at the same time, the accounts cannot pay for the same expenditures. Amounts in the HRA must be exhausted before reimbursements may be made from the FSA, except for qualifying expenses not covered by the HRA. When a person is enrolled in an HRA and an FSA, there is no federal requirement that the FSA be limited in purpose or post-deductible. However, the employer has the authority to implement such policies, as well as to require that the FSA be exhausted if the HRA must also be exhausted before the arrangement's health insurance begins. HSAs and HRAs are offered to federal employees and annuitants through the Federal Employees Health Benefits Program (FEHBP). A federal health care FSA is also available to federal employees, though not to annuitants. For 2005, the U.S. Office of Personnel Management (OPM) prohibited enrollees in FEHBP's HSA or HRA options from enrolling in a health care FSA. Starting in 2006, however, a health care FSA limited to vision and dental care became available for enrollees with the HSA option. Starting in 2007, federal enrollees can purchase separate vision and dental insurance as well. Health care FSAs can conflict with the objectives of HSAs and HRAs. People with FSAs receive tax advantages for the first dollars of health care expenditures without assuming the additional risk associated with the high deductible insurance that is required of HSAs and that usually accompanies HRAs. While they cannot carry over FSA balances for use in later years, this might not make much difference to those who would not be building up HSA or HRA balances anyway. As a consequence, those who believe that enrollment in high deductible health insurance should be encouraged might oppose further incentives for FSAs. On June 7, 2012, the House passed H.R. 436 , the Health Care Cost Reduction Act of 2012, which would allow up to $500 of unused balances in health FSAs to be distributed back to the account holder after the plan year ends and to allow over-the-counter prescriptions to be a qualified medical expense (thus repealing the provision introduced in ACA). According to JCT, the FSA provisions of H.R. 436 would reduce revenues by about $8 billion over a 10-year period. The bill has been sent to the Senate for its consideration. In the Senate, two similar bills have been referred to the Senate Finance Committee. S. 1368 , Restoring Access to Medication Act, was read twice and referred to the Senate Committee on Finance on July 14, 2011. In addition, S. 1404 , Medical FSA Improvement Act of 2011, would allow all amounts that are not spent for qualified medical expenses to be distributed to the FSA participant in taxable income after the close of the plan year. This differs slightly from H.R. 1004 , which limits the amount refunded to $500.

Health care Flexible Spending Accounts (FSAs) are benefit plans established by employers to reimburse employees for health care expenses such as deductibles and copayments. FSAs are usually funded by employees through salary reduction agreements, although employers are permitted to contribute as well. The contributions to and withdrawals from FSAs are tax-exempt. Historically, health care FSA contributions were forfeited if not used by the end of the year. However, in 2005, the Internal Revenue Service (IRS) formally determined that employers may extend the deadline for using unspent balances up to 2 1/2 months after the end of the plan year (i.e, until March 15 for most plans). The Tax Relief and Health Care Act of 2006 (P.L. 109-432) allows individuals to make limited, one-time rollovers from balances in their health care FSAs to Health Savings Accounts (HSAs). According to the Bureau of Labor Statistics National Compensation Survey, 39% of all workers in 2010 had access to a health care flexible spending account. When viewed by firm size, 56% of workers in firms with more than 100 workers had access to a health care FSA. The accounts were not as common for workers in small businesses. In establishments with fewer than 100 employees, 20% of the workers could choose to participate in an FSA. Not all employees offered an FSA chose to participate. According to a 2010 Mercer Survey, 37% of employees offered an FSA chose to participate and the average annual contribution was $1,420. In 2003, FSAs became available to federal employees for the first time. In September 2008, about 240,000 federal employees had health care FSAs. These other points might be noted about health care FSAs: FSAs are limited to employees and former employees. The IRS imposes no dollar limit on health care FSA contributions, but employers generally do. FSAs generally can be used only for unreimbursed medical expenses that would be deductible under the Internal Revenue Code, but not for health insurance or long-term care insurance premiums. Employers may impose additional restrictions. The Patient Protection and Affordable Care Act (ACA; P.L. 111-148), some provisions of which are amended by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152), modified the definition of qualified medical expenses to exclude over-the-counter prescriptions (not prescribed by a physician) as a qualified expense effective 2011. In addition, ACA limits the annual FSA contributions to $2,500 beginning in 2013. On June 7, 2012, the House passed H.R. 436, the Health Care Cost Reduction Act of 2012, which would allow up to $500 of unused balances in health FSAs to be distributed back to the account holder after the plan year ends and to allow over-the-counter prescriptions to be a qualified medical expense (thus repealing the provision introduced in ACA). The bill has been sent to the Senate for its consideration. Similar bills in the Senate have been referred to the Senate Finance Committee (S. 1368 and S. 1404). This report discusses these bills in greater detail. This report will be updated for new data or as legislative activity occurs.

The health of the U.S. manufacturing sector has been a major concern of Congress for more than three decades. Over the years, Congress has enacted a wide variety of tax preferences, direct subsidies, import restraints, and other federal programs intended to bolster the manufacturing sector, often with the goal of retaining or recapturing highly paid manufacturing jobs. Only a small proportion of U.S. workers is now employed in factories, as manufacturers have shifted low-value, labor-intensive production, such as apparel and shoe manufacturing, to other countries. Meanwhile, U.S. factories have stepped up production of goods that require high technological sophistication but relatively little direct labor. Despite highly publicized factory closures, the good-producing capacity of the U.S. economy remains near its all-time peak, as measured by the Federal Reserve Board. Recent data, however, challenge the belief that the manufacturing sector, taken as a whole, will continue to flourish. In particular, statistics showing that domestic value added represents a diminishing share of the value of U.S. factory output have been interpreted by many analysts as indicating that manufacturing is "hollowing out" as U.S. manufacturers undertake more high-value work abroad. Economic data have been slow to take note of this development, which raises the question of whether the United States will continue to generate highly skilled, high-wage jobs related to advanced manufacturing. This report discusses economic evidence related to the "hollowing out" thesis with respect to the manufacturing sector. It then considers the policy implications of the debate. The United States has a very large manufacturing sector. In 2011, manufacturers' shipments reached $5.4 trillion, more than one-third of the gross domestic product and 11% above the level of 2010. Although many factories closed or reduced production during the 2007-2009 recession, output has rebounded since the summer of 2009. In February 2013, the Federal Reserve Board's index of industrial production in manufacturing reached the highest seasonally adjusted level since June 2008, only 4% below the high recorded in December 2007. This cyclical recovery, however, has not stilled concerns about the sector's health. The number of U.S. manufacturing sites fell from 397,552 in 2001 to 335,553 as of September 2012, leaving many factories abandoned. Manufacturing employment, which peaked at 19.4 million in 1979, was 11.98 million in March 2013. Of those 12 million manufacturing workers, only 8.3 million, or 5.4% of the civilian labor force, are now engaged in factory production work. The remaining 3.7 million manufacturing workers are engaged in management, product development, marketing, and other nonproduction activities conducted within manufacturing establishments. These broad trends--generally expanding manufacturing output coupled with minimal job creation--are of long standing. In combination, they are taken as indicators of rapidly rising productivity. Labor productivity in U.S. manufacturing, defined as output per work hour, has increased 16% since 2005 and 45% since 2000 as manufacturers have shifted away from labor-intensive production. A rapid rise in productivity would be consistent with the belief that U.S. manufacturing is becoming more efficient and technologically sophisticated and therefore requires less labor; one analogy might be the farm sector, in which the labor force has shrunk to a small fraction of its size a century ago despite a vast increase in output. The estimates of rising manufacturing output and capacity and of rapidly improving labor productivity, however, rely critically on price adjustments that attempt to account for improvements in the quality of computers and certain other high-technology products. Such adjustments are required because, for example, simply measuring changes in the quantity or value of the computers produced each year would have little economic meaning given the very rapid increase in those computers' capabilities. Government statistical agencies address this problem by making highly technical adjustments when measuring certain prices. These adjustments can affect prominent economic indicators, such as gross domestic product and labor productivity. The industries for which data are adjusted in this way, such as semiconductor manufacturing, are among the most vigorous in U.S. manufacturing, leading to questions about whether reported improvements in manufacturing represent real changes or are merely the result of statistical adjustments. While some data thus indicate that U.S. manufacturing is resilient and recovering well from the 2007-2009 recession, two facts in particular support the argument that the manufacturing sector is more challenged than the government's output and productivity measures imply: Unlike previous expansions, the two most recent cyclical upturns in the U.S. economy have not brought more jobs in manufacturing. Factory output rose roughly 20% from the trough of the 2001 recession through 2007 without generating factory jobs. This pattern has repeated itself since June 2009; both total manufacturing employment and manufacturing production employment in March 2013 were only 2% higher than at in June 2009, the deepest point of the 2007-2009 recession, despite a 20.8% increase in factory output. By some measures, value added by U.S. manufacturing establishments appears to represent a declining share of the value of factory shipments. If this measurement is correct, although total factory output is rising, the measured contribution of U.S. workers to the value of the final products may not be keeping pace. Some commentators refer to this phenomenon as "hollowing out." Value added represents one measure of the health of manufacturing. Conceptually, value added equals the value of manufacturers' shipments less the value of purchased inputs. Employees' pay and benefits, depreciation of capital investment, business income taxes, and returns to business owners all are components of value added. In essence, value added is meant to capture the share of the value of final products that is being added "in house." Value added is typically assessed with two different metrics. One metric, the growth rate of "real" value added, provides information about the expansion of industrial output but is subject to the technology-related adjustment issues discussed above. The other metric, which avoids these adjustment issues, is the ratio of each year's manufacturing value added to that year's manufacturing shipments. For an individual firm, a decline in the ratio of value added to shipments may not be meaningful. To see why, consider a firm that produces a component, uses the component to make another product, and sells that product. If the firm were to split itself in half, so that one entity makes the component and sells it to a separate entity that makes the finished product, manufacturers' total shipments would increase but total value added would not change. The resulting decline in the ratio of value added to shipments would have no economic significance. The situation may be different, however, at the level of an industry or of the manufacturing sector as a whole. In these cases, a lower ratio of value added to shipments could reveal important changes. One might be diminished profitability. Another might be that manufacturers' costs for certain inputs, such as electricity or paperboard cartons, are rising faster than the prices manufacturers receive for their products. A third possibility could be that manufacturers are collectively making greater use of imported parts and components. From 1990 through 2005, U.S. manufacturing value added fluctuated in a narrow range, between 46.3% and 48.5% of the value of manufacturers' shipments, according to Census Bureau estimates. Since 2006, however, the ratio has remained below 44.8% (see Figure 1 ). The decline in the ratio, which began in 2003, predated the 2007-2009 recession. The ratio of value added to shipments as measured by the Census Bureau was 41.7% in 2011, well below the average of the past two decades. Data compiled by the Bureau of Economic Analysis (BEA), using different methods, show a generally similar trend, save for a spike in the manufacturing value-added ratio in 2009. According to BEA's estimates, the value-added ratio was 31.95% in 2011 and 32.5% in the first half of 2012, well below the 34.3% average since 1987. The interpretation of the trends in the two data series reported in Figure 1 is a matter of controversy among economists. A number of conceptual issues and statistical deficiencies complicate interpretation. Among the most important of these problems are the following. Accounting for purchased services. The Census Bureau includes manufacturers' outlays for telecommunications, advertising, transportation, and other services purchased from third parties in their value added, but BEA does not. This is the main reason the Census measurement of value added relative to sales is normally 9 to 12 percentage points higher than the BEA measurement. Census treats services purchased by manufacturers differently from materials purchased by manufacturers, which are excluded from its measurement of value added. Conceptually, there is no reason for this difference, but until recently the government lacked reliable data on purchased services, and a change in the Census methodology now would affect long-term comparability. Accounting for research and development. Government statistics include the costs of a manufacturer's research and development staff in value added in the same way as the costs of its production employees. Economists have long debated whether research and development should be treated instead as investment. BEA estimates that this accounting change would have raised the annual growth rate of value added in private industry slightly between 1995 and 2007, and that it would have caused value added in certain high-tech sectors, notably pharmaceutical, instrument, and aerospace manufacturing, to grow faster than official statistics indicate. BEA will begin publishing data treating corporate research and development spending as investment in 2013. Intellectual property exports. Many companies conduct research and development in the United States and use or license the resulting designs, patents, and brand names for manufacturing abroad. In principle, if this intellectual property is licensed to a foreign producer, whether or not owned by a U.S.-based company, it appears in U.S. trade data as a services export. However, the measurement of value added can become blurred if the foreign-made product is then imported into the United States to be incorporated into other goods; U.S. data on manufacturing may not adequately correct for the fact that some of the import's value was originally created in the United States or may categorize that U.S. value added as a product of the service sector rather than the manufacturing sector. Moreover, if the intellectual property is licensed from a U.S. operation to a foreign operation within a single multinational company, the licensing fee may not reflect the true economic value of the intellectual property. These complexities tend to make U.S. manufacturing value added appear smaller than it really is, and this bias may have increased over time as "offshoring" of assembly work has become more common. Factoryless manufacturing. A growing number of companies widely considered to be manufacturers--perhaps the best known is the electronics company Apple Inc.--specialize in certain processes, such as design, distribution, or service, but perform little or no physical production themselves. The activities of such "factoryless manufacturers" may show up in government data as "wholesale trade" rather than as "manufacturing," leading to the possibility that an increasing proportion of products with high U.S. value added are being omitted from the calculation of manufacturing output and value added. If this occurs, it may have contributed to the measured decline in the value-added ratio through most of the past decade. New internationally agreed statistical procedures would change the treatment of outsourcing by basing measurement of goods exports and imports on transfer of ownership. Conceptually, for example, if a company makes semiconductors in Texas, ships them to Mexico for assembly into a finished product, and then sells the finished product in the United States, the value of the semiconductors would henceforth count neither as an export nor as an import, and the value of the assembly work in Mexico would count as a U.S. import of manufacturing services rather than of goods. U.S. statistical agencies are still evaluating whether they can obtain the data necessary to measure trade in this way. According to a recent study by three Federal Reserve Board economists, if "factoryless manufacturing" is reclassified as a manufacturing activity rather than a wholesale trade activity, both total manufacturing shipments and U.S. value added in manufacturing are likely to be significantly larger than under current statistical procedures. Price biases. Import price indexes play a critical role in measuring value added in manufacturing. Around 40% of all imports are inputs for business use, such as parts and components, rather than consumer goods. Government statistics may understate the declines in input prices if manufacturers are shifting quickly from using a domestic input to a competing foreign-made input that is lower in cost. If this is occurring, it would mean that U.S. factories are using a greater quantity of the foreign input than assumed, and less of the domestically made alternative. These measurement problems may result in official data overstating the output of U.S. manufacturing workers, and hence their productivity, while understating the use of imported components in U.S. factories. This implies that value added in U.S. factories may be lower than statistics indicate. Table 1 summarizes the effects of these various measurement issues on reported value added in the manufacturing sector. The net effect is ambiguous. Although the statistical problems are serious, it is uncertain, on balance, whether they collectively make value added larger or smaller, relative to manufacturers' shipments, and whether they change the growth rate of value added in manufacturing. The declining share of domestic value added in particular industries is related to a broad change in businesses' strategies that emphasizes the use of global supply chains. In such arrangements, made possible by low freight transportation and communication costs, a retailer or manufacturer organizes its production on a worldwide basis rather than on a country-by-country basis. It may then obtain economies of scale in manufacturing by using a factory in one country to supply most or all of its need for a particular product worldwide, shipping intermediate inputs from place to place for additional processing in order to deliver the final product at the lowest total cost. The globalization of supply chains manifests itself in the increased use of imported inputs--so-called "intermediate inputs"--by manufacturers. This trend is strongly in evidence in the United States. In 1998, 24% of intermediate inputs used in U.S. manufacturing were imported. According to one analysis, the figure started rising in 2003 and reached 34% in 2006. Moreover, U.S. factories' use of domestic components and other materials (excluding energy) is estimated to have declined at an annual rate of 3.9% between 1998 and 2006, while their use of imported components and materials is estimated to have risen at a 3.5% rate. One consequence of increased reliance on international supply chains has been an increase in the share of manufactured goods' final value that is imported. This appears to be the case not just for the United States, but globally. According to a recent study for the World Bank, "For the world as a whole, there has been a discernible drop in the value added content of exports, relative to gross exports, since 1992." In 1992, for example, 45% of the value of machinery exports worldwide was added in the exporting country; by 2007, that figure had fallen to 35%. In the case of transportation equipment, value added in exporting countries accounted for 37% of export sales in 1992, but only 27% in 2007. If domestic value added relative to sales is a valid measure of "hollowing out," then the United States may be experiencing less "hollowing out" than other major trading nations, at least with respect to exports (see Figure 2 ). According to 2009 data compiled by the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO), the United States ranked third among 40 countries in the share of export value produced domestically, and ranked first in share of domestic value added in exports of electrical and optical equipment. The data used in Figure 2 attempt to incorporate the value of imported services in foreign value added, alongside the value of imported components and raw materials. In principle, for example, if a Chinese component producer pays a licensing fee to a U.S. firm for use of a patent and then exports the resulting component to the United States, the licensing fee should count as imported value added in the Chinese export, and it should not count as imported value added in the U.S. product made with the Chinese component. However, the extent to which inputs imported into the United States contain value added in the exporting country, the United States, or third countries is uncertain due to the same conceptual factors that complicate analysis of U.S. value added in manufacturing. A recent study of the automotive seat industry illustrates the potential for confusion about the impact of global supply chains on national economies. U.S. imports of automobile seats have declined since 1994, suggesting, at first glance, that auto manufacturers are making greater use of U.S. content. More detailed analysis, however, shows that imports of seat parts, mainly from Mexico, have increased sharply. These imports consist of items such as fabrics and temperature-control devices, which may not be readily identified as auto-related. Collectively, such imports reduce the amount of measured U.S. content in the seat and in the vehicle in which the seat is installed. However, it may not be possible to determine the value of U.S. licenses and patent fees paid by the manufacturers of those imported fabrics and temperature-control devices. If that U.S.-origin intellectual property has accounted for an increasing share of the value of the foreign-made seat components over time, then the reported decline in the domestic content of finished seats may be entirely spurious. Data on the amount of U.S. content embedded in imported products have been developed only recently, and change over extended time periods cannot be tracked reliably. Data on various manufacturing sectors from the OECD-WTO database indicate that the United States is similar to other major manufacturing countries in the share of import value that can be attributed to domestic production (see Table 2 ). Evidence of the tenuous link between output and value added can be seen in China's soaring exports of what U.S. trade data label "advanced technology products," or ATP, including specified electronic and biotechnology goods. While China's bilateral trade surplus with the United States in such products soared from 2002 through 2006, all of the increase was due to processing of foreign components in Chinese factories owned, at least in part, by foreign investors. Although U.S. exports to China were lower than Chinese exports to the United States, "It appears that ATP exports from the United States to China are dominated by large scale, sophisticated, high-valued equipment and devices at the high end of these industries' value-added chains, while ATP exports from China to the United States are mainly small scale final products or components in the low end of the ATP value-added chain," a recent study concluded. It is questionable whether such studies are able to fully account for all trade conducted within global supply chains. In many instances, for example, imported inputs into U.S. manufacturing are likely to have been developed in the United States. In 2012, the United States booked $43 billion of exports of industrial process fees, including royalties and licensing fees, associated with production of goods, compared with $23 billion of imports (see Figure 3 ). These fees represent payments for intellectual property developed by manufacturing-related companies in the United States but used for physical production abroad. The true value of industrial process exports may be much larger than these official data indicate. Some 73% of reported exports of industrial process royalties and fees in 2012 stemmed from sales by a U.S. company to an affiliated company abroad, and the exporters are free to value those intra-firm transactions as they choose when they report them on BEA form BE-125. Those exports go disproportionately to countries where income from royalties and licenses receives favorable tax treatment: in 2011, 14% of U.S. industrial process exports went to Ireland and 13% to Switzerland, while only 4% went to China. These factors suggest that it is a common practice for U.S. manufacturers to initially assign licenses to their affiliates abroad, resulting in a one-time U.S. export of industrial process royalties and fees, after which the repeated relicensing by those affiliates to third parties would not be reported as U.S. exports. The difficulty in tracing the flow of funds related to intellectual property used in manufacturing has major implications for the measurement of value added. Consider, for example, an industrial process developed by workers at a manufacturing firm in the United States, licensed by the U.S. firm to its Irish affiliate, and then licensed by the Irish affiliate to a Chinese manufacturer. The Chinese firm would make payment to Ireland, not to the United States; if the U.S.-origin value added in its product is captured in international trade statistics at all, the value would be only the arbitrary amount for which the U.S. firm initially transferred the rights to Ireland. Therefore, if the Chinese firm exports the manufactured good to the United States, trade statistics may not capture the U.S.-origin value in the Chinese export. And if the Chinese export is an input into a final product manufactured in the United States, the share of U.S. value added in the final product may be underestimated because the true value of the U.S.-origin license used in making the input will not be included. Industrial process royalties and license fees are not the only services exports that may be intimately connected with manufacturing. Unfortunately, U.S. data are not sufficiently detailed to reveal the extent to which other services exports are supplied by manufacturing firms in the United States. However, the available data suggest that services likely to have been produced by U.S. manufacturers accounted for approximately $94 billion of U.S. exports in 2011. If a substantial amount of this U.S.-origin value was incorporated into foreign-made products that were then exported to the United States, value added in U.S. manufacturing might be higher than the $1.7 trillion officially reported by BEA. Industry-level data suggest that increased use of imported components may be occurring in some manufacturing industries that traditionally have high value added relative to shipments. These industries typically are intensive users of scientific research and advanced technology, and are often regarded as industries in which the United States should have an international competitive advantage. The pharmaceutical, medical instrument, tool and die, and navigation and control instrument industries have exhibited declining ratios of domestic value added to shipments over the last five years (see Table 3 ). However, all of these industries are vulnerable to the mismeasurement issues discussed above, as their imported inputs may be likely to draw on intellectual property and other services originating in the United States. The data discussed in this report shed light on a concern frequently raised in the context of national security, that U.S. manufacturers of vital products are critically dependent upon inputs from abroad. Evidence suggests that while the output of U.S. factories contains substantial foreign value added, many other countries are even more dependent upon foreign value added than is the United States, at least with respect to goods traded in international markets. As the research surveyed in this report emphasizes, traditional understandings of "manufacturing" are inadequate to explain the process by which goods are produced in the modern world economy. For a large number of goods, physical production--activities such as stamping, molding, cutting, machining, welding, and assembly--is no longer the heart of the manufacturing process. The bulk of the value in many goods comes from activities such as design, product development, marketing, and distribution, which are not necessarily performed by the same enterprises, or at the same locations, as physical production. The declining importance of physical production is in evidence in many countries, and is not a phenomenon limited to the United States. The shift to global supply chains has had both positive and negative effects on the U.S. economy. There is no doubt that it has contributed to reduced U.S. consumer prices for many manufactured products. The availability of imported intermediate inputs has probably preserved some manufacturing within the United States, as reliance on higher-cost domestic inputs might well make related U.S. final-goods manufacturing uncompetitive. Additionally, the supply chains themselves support U.S. jobs in transportation, logistics management, and other fields. At the same time, there is widespread agreement that "offshoring" has played a major role in loss of factory production work (see Figure 4 ), leading to higher unemployment and reduced incomes for some groups of workers and some communities where import-sensitive manufacturing is located. Two recent studies estimate that the rapid growth of manufactured imports from China accounted for a quarter or more of the decline in U.S. manufacturing employment in the first decade of this century. The broader impact on the U.S. labor market, however, remains a matter of considerable debate. One recent study of the growth of Chinese exports to the European Union between 1999 and 2007, directly applicable to the United States, concludes that "trade drives out low-tech firms ... and increases the incentives of incumbents to speed up technical change." This finding contradicts the many economic studies that attribute declining factory employment to technological change, as it emphasizes that the rate of technological change speeds up when trade with low-wage countries increases. It also suggests that declines in manufacturing production employment may go hand in hand with increased demand for workers with skills that are in some way related to goods production and distribution, but may not fall within the traditional definition of "manufacturing" work. The transformation of manufacturing poses novel issues for public policies aimed at the manufacturing sector. A variety of federal programs, from the Hollings Manufacturing Extension Partnership administered by the National Institute of Standards and Technology to the National Nanotechnology Initiative to the Small Business Administration's 504/CDC Loan Guaranty Program, are designed, in part, to help manufacturers upgrade technology, replace capital stock, and compete more effectively in global markets. The extent to which such efforts lead private-sector firms to select U.S. locations for high-value activities within their supply chains, and the degree to which those activities create employment, are unclear. More broadly, shifts in the nature of value added in manufacturing put into question the efficacy of policies designed to promote factory production within the United States, such as tax policies favoring investment in manufacturing equipment and "Buy American" rules requiring certain goods financed by the federal government to be produced domestically. Given that employment and economic growth are increasingly decoupled from production, it is uncertain whether policies oriented to physical manufacturing activity are best suited to achieve desired economic goals. Finally, the changes described in this report raise questions about the adequacy of government statistics. U.S. statistical agencies have made significant efforts in recent years to improve the collection of data on the service sector, corporate spending on research and development, and international trade in intangible products. Nonetheless, available data still tend to treat manufacturing and services as unrelated economic activities, and it is not clear that existing data series on domestic economic activity, trade, and freight transportation completely capture changes in the nature of manufacturing, the sources of employment, and the creation of value.

The health of the U.S. manufacturing sector has been a long-standing concern of Congress. Although Congress has established a wide variety of tax preferences, direct subsidies, import restraints, and other federal programs with the goal of retaining or recapturing manufacturing jobs, only a small proportion of U.S. workers is now employed in factories. Meanwhile, U.S. factories have stepped up production of goods that require high technological sophistication but relatively little direct labor. Labor productivity in manufacturing, as measured by government data, has grown rapidly, suggesting that the manufacturing sector as a whole remains healthy. Recent data, however, challenge the belief that the manufacturing sector, taken as a whole, will continue to flourish. Unlike previous expansions, the two most recent cyclical upturns in the U.S. economy have generated few jobs in manufacturing. Moreover, statistics suggest that domestic value represents a diminishing share of the value of U.S. factory output. One interpretation of these data is that manufacturing is "hollowing out" as companies undertake a larger proportion of their high-value work abroad. These developments raise the question of whether the United States will continue to generate highly skilled, high-wage jobs related to advanced manufacturing. The evidence concerning "hollowing out" is ambiguous, as conceptual issues and statistical deficiencies make it difficult to determine whether the recent decline in manufacturing value added, relative to shipments, is a short-term phenomenon or a long-term trend. Despite improvements in recent years, U.S. statistical agencies still tend to treat manufacturing and services as unrelated economic activities, and it is not clear that existing data series on domestic economic activity, trade, and freight transportation adequately capture changes in the nature of manufacturing, the sources of employment, and the creation of value. Nonetheless, evidence suggests strongly that physical production activities account for a diminishing share of the final value of manufactured products, with service-related inputs such as research, product development, and marketing becoming more important. Further, the production of many goods is dispersed across multiple locations along global supply chains, making it difficult to determine where value is added. Such shifts pose a challenge to efforts to capture economic value by promoting goods production in the United States. In the context of national security, the fact that U.S. manufacturers of vital products are critically dependent upon inputs from abroad is frequently a subject of concern. International comparisons indicate that the United States is in no way unique in its dependence on foreign inputs to manufacturing. Although the output of U.S. factories contains a large proportion of foreign value added, many other countries appear to be even more dependent upon foreign value added than is the United States, at least with respect to goods traded in international markets.

The Institute of Medicine (IOM), the National Committee on Vital and Health Statistics(NCVHS), and other expert panels have identified information technology (IT) as one of the mostpowerful tools for reducing medical errors, lowering health costs, and improving the quality ofcare. (1) They recommendthat health care organizations adopt IT systems to support the electronic collection and exchange ofpatient information. The goal is for these systems to operate seamlessly as part of a national healthinformation infrastructure (NHII), which would enable health care providers anywhere in the countryto access patient information at the point of care. While supporting the delivery of high-qualitypatient care, experts emphasize that a NHII must also meet the nation's needs for public healthsurveillance, biodefense, and biomedical research, and protect the privacy of individuals. The U.S. health care industry lags well behind other sectors of the economy in its investmentin IT, despite growing evidence that electronic information systems can play a critical role inaddressing the many challenges the industry faces. There are significant financial, legal, andtechnical obstacles to the adoption of health IT systems. The issue for Congress, in which there isbroad bipartisan support for health IT, is how best to create incentives for the adoption of ITthroughout the health care industry. Congress and the Administration have already taken a number of important steps to promotehealth IT. The 2003 Medicare Modernization Act instructed the HHS Secretary to adopt electronicprescription standards and establish a Commission for Systemic Interoperability. The Commissionis charged with developing a comprehensive strategy for implementing data and messaging standardsto support the electronic exchange of clinical data. On April 27, 2004, President Bush called for thewidespread adoption of interoperable electronic health records (EHRs) within 10 years andestablished the Office of the National Coordinator for Health Information Technology (ONCHIT). ONCHIT has developed a strategic 10-year plan outlining steps to transform the delivery of healthcare by adopting EHRs and developing a National Health Information Infrastructure (NHII) to linksuch records nationwide. The strategic plan identifies several potential policy options for providingincentives for EHR adoption. They include: providing grants to stimulate EHRs and regionalinformation exchange systems; offering low-rate loans and loan guarantees for EHR adoption;amending federal rules (e.g., Medicare physician self-referral law) that may unintentionally impedethe development of electronic connectivity among health care providers; and using Medicarereimbursement to reward EHR use. Lawmakers in the 109th Congress are likely to consider legislation to boost federal investmentand leadership in health IT and provide incentives both for EHR adoption and for the creation ofregional health information networks, which are seen as a critical step towards the goal ofinterconnecting the health care system nationwide. Congress laid the groundwork for establishingan NHII when it enacted the 1996 Health Insurance Portability and Accountability Act (HIPAA). HIPAA instructed the HHS Secretary to develop privacy standards to give patients more control overthe use of their medical information, and security standards to safeguard electronic patientinformation against unauthorized access, use, or disclosure. This report summarizes recently proposed and enacted legislation to promote the use ofEHRs and the development of the NHII. It begins with a brief discussion of some of the benefits ofbroadening the application of information technology (IT) in health care, as well as the significantfinancial, technical, and legal barriers to the adoption of health IT. That is followed by a summaryof the goals articulated in the federal government's strategic framework for health IT adoption. Thereport concludes with a set of tables summarizing health IT legislation in the 108th and 109thCongresses. Appendix A provides additional background information on health IT, including a listof congressional hearings, GAO reports, and online resources. In its June 2004 report, Revolutionizing Health Care Through Information Technology, thePresident's Information Technology Advisory Committee (PITAC) proposed a framework for a NHIIcomposed of four elements. (2) The EHR provides a clinician with real-time access to patient information, as well as acomplete longitudinal record of care. A fully integrated EHR enables a physician to update clinicaland other information about a patient on a continuous basis. Such an integrated system permits aphysician, for example, to view a history of the patient's medical condition and visits to healthproviders (with submenus for notes from those visits), images and reports of diagnostic procedures,current medications, functional status and social service eligibility, schedule of preventive services,allergies, and contact information for family caregivers. Linking a patient's EHR to a computerized CDS system provides clinicians with real-timediagnostic and treatment recommendations. CDS systems, which include a range of technologiesfrom simple clinical alerts and warnings of prescription drug interactions to detailed clinicalprotocols and procedures, facilitate the practice of evidence-based medicine by providing clinicianswith state-of-the-art medical knowledge at the point of care. CPOE minimizes handwriting and other communication errors by having physicians andother providers enter orders into a computer system. Originally designed for ordering medications,more advanced CPOE systems include orders for x-rays and other diagnostic procedures, referrals,discharges, and transfers. CPOE may also be linked to a patient's EHR and various decision supportfunctions. The final and most important element of a NHII is electronic connectivity (via the Internetand other networks) enabling health care providers to exchange patient health information. Networks that permit electronic communication among providers must be secure in order tosafeguard the information from unauthorized access, use, and disclosure. They also require thedevelopment of data and messaging standards to establish the critical goal of interoperability, thatis, the ability of two or more IT systems (computers, networks, software, and other IT components)to communicate with one another and make sense of the data they exchange. A small but growingnumber of communities and health care systems around the country have developed EHRs andestablished secure platforms for the exchange of health data among providers, patients, and otherauthorized users (e.g., the Veterans Health Administration, the Indiana Network for Patient Care,the Santa Barbara County Care Data Exchange, and the New England Healthcare Electronic DataInterchange Network). The IOM's March 2001 report on health care quality, Crossing the Quality Chasm: A NewHealth Care System for the 21st Century, emphasized the need for improvement in six key areas: safety, effectiveness, responsiveness to patients, timeliness, efficiency, and equity. A growingnumber of published studies suggest that IT can play a key role in improving the quality of care ineach of these areas. In the area of safety, CPOE systems with decision support functions can reduceerrors in drug prescribing and dosing. Clinical decision support systems have been shown toimprove efficiency, for example, by reducing redundant lab tests. They can also improve theeffectiveness of care by promoting compliance with clinical practice guidelines. Health IT may beespecially beneficial for inner-city and rural populations and other medically underserved areas. Real-time access to specialty information, including consultations between rural physicians andleading specialists at academic medical centers, helps promote an equitable health care system byreducing the geographic variability in access to the best quality care. The secure transmission ofpatient information among physicians will significantly improve the coordination of care among the60 million Americans with multiple chronic conditions. Studies have shown that poor coordinationof care among Medicare beneficiaries with multiple chronic conditions leads to unnecessaryhospitalization, duplicate tests, conflicting clinical advice, and adverse drug reactions as a result ofover-medication. An IT infrastructure has great potential to contribute to achieving other important nationalobjectives, such as homeland security and improved public health services. Linked healthinformation networks are key to reducing the time it takes to detect and respond to disease outbreaks,whether they are naturally occurring or the result of a bioterrorist attack. They are also an importanttool for helping organize and execute large-scale vaccination campaigns and for monitoring thehealth of the population. Finally, health IT is becoming increasingly important for various forms ofbiomedical and health services research, and for translating research findings into clinical practicemore quickly. By some estimates it may take as long as 17 years for new research findings to befully integrated into general medical practice. (3) The U.S. health care industry, which represents about 15% of GDP, lags far behind othersectors of the economy in its investment in IT, despite growing evidence that electronic informationsystems can play a critical role in addressing many of the challenges the industry faces. There aresignificant obstacles to the adoption of EHRs and the creation of a NHII, some of which are brieflydiscussed below. Enormous amounts of data needed for clinical care, patient safety, and quality improvementcurrently reside on computers. However, EHRs and community-based health information networkshave been slow to develop because of a lack of interoperability standards to support electronic dataexchange. Physicians and other providers are hesitant to invest in IT systems, fearing that they mightnot be able to exchange patient information with local pharmacies, hospitals, or even otherphysicians. Common standards for organizing, representing, and encoding health information permitthe efficient exchange of clinical and patient safety data. They also support the assimilation ofexternal data sources into decision support tools for providers (e.g., alerts for possible drug-druginteractions). The federal government is playing a leading role in encouraging the development andadoption of interoperability standards for health information throughout the U.S. health care system. The Departments of Health and Human Services (HHS), Defense (DOD), and Veterans Affairs (VA)are partners in the Consolidated Health Informatics (CHI) initiative, one of 24 eGov initiatives tosupport President Bush's Management Agenda. The goal of the CHI initiative is to establish federalhealth information interoperability standards both to promote information sharing across the threefederal departments that deliver health care services and to serve as a model for the private sector. To date, the agencies have adopted 20 sets of standards developed by private-sector StandardsDevelopment Organizations (SDOs). They include messaging standards, standards for the electronicexchange of clinical lab results, standards for retail pharmacy transactions, and standards for theretrieval and transfer of images and associated diagnostic information. HHS has also signed anagreement to license Systematized Nomenclature of Medicine -- Clinical Terms (SNOMED CT),a standardized medical vocabulary developed by the College of American Pathologists and availablefor free to users in the United States. SNOMED CT, which is now available through the NationalLibrary of Medicine, (4) isthe most comprehensive clinical vocabulary available and covers most aspects of clinical medicine. It will help structure and computerize the medical record and reduce variability in the way the dataare captured, encoded and used for clinical care of patients and for medical research. In May 2003, HHS requested that the IOM provide guidance to the agency on a set of basic"functionalities" that an EHR should possess, that is, the types of information that should beavailable to providers when making clinical decisions (e.g., diagnoses, allergies, lab results), and thetypes of decision-support capabilities that should be present (e.g., alerts to potential drug-druginteractions)." The IOM did not address specific data standards (e.g., terminology, messagingstandards, diagnostic codes). Health Level Seven (HL7), a leading SDO working on thedevelopment of an EHR standard, has taken the core functionalities identified by the IOM andincorporated them into its draft standard, which has been approved and is undergoing a two-year trialbefore it becomes an official standard. (5) Coordinating the care a patient receives from multiple providers does not require thetransmission of the entire EHR with each referral. In most cases the physician to whom a patient isreferred needs only the most relevant and timely facts about the patient's condition. ASTMInternational, in collaboration with the Massachusetts Medical Society, the Health InformationManagement and Systems Society, and the American Academy of Family Physicians, is developingthe Continuity of Care Record (CCR) to meet that need. The CCR is intended to be a nationalstandard for all relevant information necessary for continuity of care. It consists of a minimum dataset that includes provider information, insurance information, patient's health status (e.g., allergies,medications, vital signs, diagnoses, recent procedures), recent care provided, as well asrecommendations for future care and reasons for referral or transfer. The data contained within theCCR are a subset of the patient's full record that exists in an EHR. Each new provider that sees thepatient is able to access the CCR and update the information as necessary. Thus the CCR providesa vehicle for exchanging clinical information among providers, institutions, or other entities. It mayalso be used by the patient as a brief summary of recent care. (6) Congress laid the groundwork for establishing an NHII when it enacted the HIPAA, P.L.104-191 in 1996. HIPAA instructed the HHS Secretary to issue electronic format and data standardsfor several routine administrative transactions between health care providers and health plans (e.g.,reimbursement claims) and adopt security standards to safeguard electronic patient informationagainst unauthorized access, use, or disclosure. Developing a secure platform to protect confidentialhealth data is central to the growth of an NHII. Under HIPAA, HHS has also issued health privacystandards that give individuals the right of access to their medical information and prohibit plans andproviders from using or disclosing such information without the patient's authorization, except forroutine health care operations and other specified purposes. The growing use and exchange ofelectronic health data raises serious privacy concerns among the public and some lawmakers, whoquestion whether the privacy standards are sufficiently broad in scope to protect confidential patientinformation. There are two key financial obstacles to the adoption of EHR and the development of anNHII: investment costs, and the misalignment between costs and benefits. Investment in IT isexpensive and must compete with other priorities, including new buildings as well as othertechnologies with more direct application to clinical care and greater certainty for increasedrevenues. A full clinical IT system that includes CPOE and an EHR, coupled with clinical decisionsupport functions, can cost tens of millions of dollars for a large hospital. And that does not includethe costs of training and systems support. The start-up and maintenance costs of IT systems may be especially burdensome for smallphysician practices. While those costs vary tremendously, depending on the nature of the practiceand the applications involved, the average cost of an EHR can range from $16,000 to $36,000. Thecomplexity of the technology, the time to complete implementation, and the changes in officeworkflow patterns create additional barriers to adopting IT systems. But perhaps the most criticalissue for physicians is the perception that the IT-related benefits of improved efficiency and qualityof care accrue largely to the payers and patients, not to the providers who bear most of theimplementation costs. Rather than reward quality, most physician reimbursement systems emphasize volume ofservices. Physicians are paid for each procedure or service they provide, regardless of its quality. This approach encourages providers to see as many patients as possible and to emphasize theprovision of a billable service, such as an MRI, over technology that might improve the quality ofmany services. A physician group that invests in a clinical IT system to improve the way it managesthe care of patients with chronic conditions can reduce the number of complications and thehospitalization rate. But unless the change results in additional office visits, only the payer sees afinancial benefit. One potential solution to this problem is to provide direct payments to physicianswho use IT systems. Another is to adopt a pay-for-performance scheme that rewards clinicians whodeliver the best quality of care, according to standardized measures, as opposed to the highestvolume of care. Health IT experts have identified several federal laws that may unintentionally impede thedevelopment of electronic connectivity in health care. Because these laws do not directly addresshealth IT, health care providers are uncertain about what would constitute a violation or create therisk of litigation. The Medicare physician self-referral (Stark) law (42 U.S.C. SS 1395nn) and theanti-kickback law (42 U.S.C. SS 1320a-7b(b)), which covers all federal health care programs, are ofchief concern. Both are intended to counter fraud and abuse. (7) The Stark law prohibits physicians from referring patients to any entity for certain healthservices if the physician has a financial relationship with the entity, and prohibits entities from billingfor any services resulting from such referrals, unless an exception applies. The law discouragesphysicians from accepting IT resources (e.g., hardware and software) from a hospital or other healthcare entity out of concern that they would be in violation if they subsequently referred patients to thatentity. The anti-kickback law, like the self-referral law, also impedes arrangements between healthcare entities that promote the adoption of health IT. It prohibits an individual or entity fromknowingly or willfully offering or accepting remuneration of any kind to induce a patient referral foror purchase of an item or service covered by any federal health care program. On March 26, 2004, the Centers for Medicare and Medicaid Services (CMS) published afinal interim rule creating several new exceptions under the physician self-referral law, including onefor IT items and services furnished to physicians to enable them to participate in "community-widehealth information systems." (8) Experts have questioned whether this term is sufficiently inclusiveto cover all the various health IT arrangements. They have also criticized the lack of a parallelexception under the anti-kickback law. On April 27, 2004, President Bush called for the widespread adoption of interoperable EHRswithin 10 years and signed Executive Order 13335, which established the position of NationalCoordinator for Health Information Technology within HHS. Secretary Tommy Thompsonappointed David Brailer, MD, PhD, one of the country's foremost health IT experts, to serve in thenew position. The Executive Order directed the National Coordinator within 90 days to develop astrategic 10-year plan outlining steps to transform the delivery of health care by adopting EHRs anddeveloping a NHII to link such records nationwide. On July 21, 2004, Brailer and Thompson released a Framework for Strategic Action entitled, The Decade of Health Information Technology: Delivering Consumer-Centric and Information-RichHealth Care. (9) Althoughthe federal government has taken the lead in setting the health IT agenda, the framework sets out abottom-up approach in which the role of HHS is to promote and encourage the private sector to buildcommunity-level networks. Adopting interoperability standards will over time permit these localnetworks to connect with one another to form an NHII. The framework identified four major goals,with strategic action areas for each: Inform clinical practice . This goal focuses on bringing EHRs into clinicalpractice by providing incentives for EHR adoption, reducing the risk of EHR investment, andpromoting EHR diffusion in rural and medically underserved areas. Interconnect physicians . This goal centers on building an interoperable healthinformation infrastructure so that EHRs follow the patient, and clinicians have access to criticalhealth information when treatment decisions are being made. The strategies for realizing this goalinvolve fostering community-based health information exchange projects, developing a nationalhealth information network, and coordinating federal health informationsystems. Personalize health care . This goal involves using health IT to help individualsmanage their own wellness and become more involved in personal healthdecisions. Improve population health . The final goal requires the timely collection,analysis, and dissemination of clinical information to improve the evaluation of health care delivery,public health monitoring, and biosurveillance. It also helps accelerate research and the translationof research findings into clinical products and practice. The framework identifies several potential policy options for providing incentives for EHRadoption. They include: regional grants and contracts to stimulate EHRs and community informationexchange systems; improving the availability of low-rate loans for EHRadoption; updating federal rules on physician self-referral that may unintentionallyrestrict the development of health information networks; using Medicare reimbursements to reward the use of EHRs;and funding Medicare pay-for-performance demonstrationprograms. The Medicare Prescription Drug, Improvement, and Modernization Act (MMA), which thePresident signed into law on December 8, 2003 ( P.L. 108-173 ), included provisions for electronicprescribing standards. The bill requires the standards to include not just electronic script writing,but also the patient's medication history and decision support for identifying potential drug-to-druginteractions. In addition, the MMA called for the establishment of a commission to develop acomprehensive strategy for the adoption and implementation of health IT data standards. Finally,the bill authorized IT grants for physicians and established demonstration projects to determine howto improve the quality of care through the adoption of IT. Table 1 , beginning on page 10, providesa summary of the IT-related provisions in the MMA. In the 108th Congress, the House and Senate passed competing versions of the Patient Safetyand Quality Improvement Act ( H.R. 663 , S. 720 ). Despite broad bipartisansupport for the legislation, no further action took place before adjournment in December 2004. OnMarch 9, 2005, the Senate Committee on Health, Education, Labor, and Pensions (HELP)unanimously approved a new patient safety bill (S. 544), which is identical to last year'sSenate-passed measure. The patient safety legislation is intended to encourage the voluntaryreporting of information on medical errors by establishing federal evidentiary privilege andconfidentiality protections for such information. For more information on the patient safetylegislation, see CRS Report RL31983 , Health Care Quality: Improving Patient Safety by PromotingMedical Errors Reporting. S. 544 also requires the HHS Secretary to adopt voluntary, national interoperability standardsfor the electronic exchange of health care information. H.R. 663, in the 108th Congress, containeda similar requirement, as well as several additional health IT provisions, none of which are includedin S. 544. The House-passed bill authorized health IT grants for physicians and hospitals, andmandated the creation of a Medical Information Technology Advisory Board (MITAB). During the 108th Congress, lawmakers introduced a number of bills (i.e., H.R. 2915, H.R.4880, S. 2003, S. 2421, S. 2710, S. 2907) to boost federal investment and leadership in IT in aneffort to promote the adoption of EHRs and the development of a NHII. With the exception of H.R.2915, these measures also contained quality-of-care provisions. They included devising standardizedmeasures of physician performance and using them as the basis of pay-for-performance initiatives. So far in the 109th Congress, lawmakers have introduced two health IT bills. RepresentativeGonzalez has introduced the National Health Information Incentive Act of 2005 (H.R. 747), andSenator Kennedy has reintroduced S. 2907 as Title II of the Affordable Health Care Act (S. 16). Table 2 , beginning on page 12, compares the incentives in each of those health IT bills. Tables 3 and 4 provide more detailed summaries of the major provisions in the patient safety and health ITbills introduced in the 108th and 109th Congresses, respectively. Table 1. Summary of Health Care Information Technology (IT) Provisions in the Medicare ModernizationAct ( P.L.108-173 ) Table 2. Comparison of Bills to Encourage the Adoption of Health Information Technology (IT) Table 3. Summary of Health Information Technology (IT) Legislation Introduced in the 108thCongress a. H.R. 663 was reported (as amended) by the Energy and Commerce Committee on Mar. 6, 2003. The Ways and Means Committee approved similarlegislation (H.R. 877, H.Rept. 108-31 ) on Mar. 11, 2003. While the Ways and Means bill would amend the Medicare statute and apply only tohospitals and other health care facilities and their employees that provide health care services under Medicare Part A, the Energy and Commercemeasure would amend the Public Health Service (PHS) Act and have broader coverage. H.R. 663 would apply to any individual or entity licensedto provide health care services. Following negotiations between members of both panels, it was agreed that the new law should be written intothe PHS Act and that the Energy and Commerce bill (H.R. 633) would be brought to the floor for consideration by the full House. b. Institute of Medicine, Priority Areas for National Action: Transforming Health Care Quality (Washington: National Academy Press, 2003). c. P.L. 106-129 , the Healthcare Research and Quality Act of 1999, directed AHRQ to submit to Congress annually a report on "disparities in health caredelivery as it relates to racial factors and socioeconomic factors in priority populations," beginning in FY2003. The first National Report onHealthcare Disparities was released on Dec. 22. 2003, and is available online at http://qualitytools.ahrq.gov/disparitiesReport/download_report.aspx . Table 4. Summary of Health Information Technology (IT) Legislation Introduced in the 109thCongress a. Institute of Medicine, Priority Areas for National Action: Transforming Health Care Quality (Washington: National Academy Press, 2003).

The Institute of Medicine, the National Committee on Vital and Health Statistics, and otherexpert panels have identified information technology (IT) as one of the most powerful tools forreducing medical errors, lowering health costs, and improving the quality of care. However, the U.S.health care industry lags far behind other sectors of the economy in its investment in IT, despitegrowing evidence that electronic information systems can play a critical role in addressing the manychallenges the industry faces. Adoption of health IT systems faces significant financial, legal, andtechnical obstacles. Congress and the Administration have taken a number of important steps to promote healthIT. The 2003 Medicare Modernization Act instructed the HHS Secretary to adopt electronicprescription standards and establish a Commission for Systemic Interoperability. The Commissionis charged with developing a comprehensive strategy for implementing data and messaging standardsto support the electronic exchange of clinical data. On April 27, 2004, President Bush called for thewidespread adoption of interoperable electronic health records (EHRs) within 10 years andestablished the position of National Coordinator for Health Information Technology. Pursuant tothe President's order, the National Coordinator has developed a strategic 10-year plan outlining stepsto transform the delivery of health care by adopting EHRs and developing a National HealthInformation Infrastructure (NHII) to link such records nationwide. The strategic plan identifies several potential policy options for providing incentives for EHRadoption. They include: providing grants to stimulate EHRs and regional information exchangesystems; offering low-rate loans and loan guarantees for EHR adoption; amending federal rules (e.g.,Medicare physician self-referral law) that may unintentionally impede the development of electronicconnectivity among health care providers; and using Medicare reimbursement to reward EHR use. Health IT has broad bipartisan support among lawmakers. The 109th Congress is likely toconsider legislation to boost federal investment and leadership in health IT and provide incentivesboth for EHR adoption and for the creation of regional health information networks, which are seenas a critical step towards the goal of interconnecting the health care system nationwide. Severalhealth IT bills were introduced during the last Congress and, to date, two bills ( H.R. 747 , S. 16 ) have been introduced this year. Congress laid the groundwork forestablishing an NHII when it enacted the 1996 Health Insurance Portability and Accountability Act(HIPAA). HIPAA instructed the HHS Secretary to develop privacy standards to give patient morecontrol over the use of their medical information, and security standards to safeguard electronicpatient information against unauthorized access, use, or disclosure.

Senate rules, procedures, and precedents give significant parliamentary power to individual Senators during the course of chamber deliberations. Many decisions the Senate makes--from routine requests for additional debate time, to determinations of how legislation will be considered on the floor--are arrived at by unanimous consent. When a unanimous consent request is proposed on the floor, any Senator may object to it. If objection is heard, the consent request does not take effect. Efforts to modify the original request may be undertaken--a process that can require extensive negotiations between and among Senate leaders and their colleagues--but there is no guarantee that a particular objection can be addressed to the satisfaction of all Senators. The Senate hold emerges from within this context of unanimous-consent decision-making as a method of transmitting policy or scheduling preferences to Senate leaders regarding matters available for floor consideration. Many hold requests take the form of a letter addressed to the majority or minority leader (depending on the party affiliation of the Senator placing the hold) expressing reservations about the merits or timing of a particular policy proposal or nomination. An example of a hold letter is displayed in Appendix A . More often than not, Senate leaders--as agents of their party responsible for defending the political, policy, and procedural interests of their colleagues--honor a hold request because not doing so could trigger a range of parliamentary responses from the holding Senator(s), such as a filibuster, that could expend significant amounts of scarce floor time. Unless the target of a hold is of considerable importance to the majority leader and a supermajority of his colleagues--60 of whom might be required to invoke cloture on legislation under Senate Rule XXII--the most practical course of action is often to lay the matter aside and attempt to promote negotiations that could alleviate the concerns that gave rise to the hold. With hold-inspired negotiations underway, the Senate can turn its attention to more broadly-supported matters. Holds can be used to accomplish a variety of purposes. Although the Senate itself makes no official distinctions among holds, scholars have classified holds based on the objective of the communication. Informational holds, for instance, request that the Senator be notified or consulted in advance of any floor action to be taken on a particular measure or matter, perhaps to allow the Senator to plan for floor debate or the offering of amendments. Choke holds contain an explicit filibuster threat and are intended to kill or delay action on the target of the hold. Blanket holds are leveled against an entire category of business, such as all nominations to a particular agency or department. Mae West holds intend to foster negotiation and bargaining between proponents and opponents. R etaliatory holds are placed as political payback against a colleague or administration, while rolling (or rotating ) holds are defined by coordinated action involving two or more Senators who place holds on a measure or matter on an alternating basis. Until recently, many holds were considered a nonymous (or secret ) because the source and contents of the request were not made available to the public, or even to other Senators. Written hold requests emerged as an informal practice in the late 1950s under the majority leadership of Lyndon B. Johnson as a way for Senators to make routine requests of their leaders regarding the Senate's schedule. Early usage was largely consistent with prevailing expectations of Senate behavior at that time, such as reciprocity, deference, and accommodation of one's Senate colleagues. Over time, holds have evolved to become a potent extra-parliamentary practice, sometimes likened to a "silent filibuster" in the press. "The hold started out as a courtesy for senators who wanted to participate in open debate," two Senators wrote in 1997. Since then, "it has become a shield for senators who wish to avoid it." These and other Senators were concerned that keeping holds confidential tended to enable Senators who placed holds to block measures or nominations while leaving no avenue of recourse open to their supporters. Accordingly, rather than restricting the process itself, recent attempts to alter the operation of holds have focused on making the secrecy of holds less absolute. The Senate has considered a variety of proposals targeting the Senate hold in recent years, two of which the chamber adopted. Both sought to eliminate the secrecy of holds by creating a process through which holds--formally referred to in the new rules as "notices of intent to object to proceeding"--would be made public within some period of time if certain criteria were met. Prior to these rules changes, hold letters were written with the expectation that they would be treated as private correspondences between a Senator and his or her party leader. The first proposal, enacted in 2007 as Section 512 of the Honest Leadership and Open Government Act ( P.L. 110-81 ), established new reporting requirements that were designed to take effect if either the majority or minority leader or their designees, acting on behalf of a party colleague on the basis of a hold letter previously received, objected to a unanimous consent request to advance a measure or matter to the Senate floor for consideration or passage. If objection was raised on the basis of a hold letter, then the Senator who originated the hold was expected to submit a "notice of intent to object" to his or her party leader and, within six days of session thereafter, deliver the objection notice to the Legislative Clerk for publication in both the Congressional Record and the Senate's Calendar of Business (or, if the hold pertained to a nomination, the Executive Calendar ). Under Section 512, objection notices were to take the following form: "I, Senator ___, intend to object to proceeding to ___, dated ___ for the following reasons___." To accommodate the publication of these notices, a new "Notice of Intent to Object to Proceeding" section was added to both Senate calendars as shown in Appendix B . Each calendar entry contained four pieces of information: (1) the bill or nomination number to which the hold pertained; (2) the official title of the bill or nomination; (3) the date on which the hold was placed; and (4) the name of the Senator who placed the hold. Publication was not required if a Senator withdrew the hold within six session days of triggering the notification requirement. Once published, an objection notice could be removed from future editions of a calendar by submitting for inclusion in the Congressional Record the following statement: "I, Senator ___, do not object to proceed to ___, dated ___." On October 3, 2007, roughly two weeks after the new disclosure procedures were signed into law, the first notice of an intent to object was published in the Congressional Record . A total of 5 such notices appeared during the 110 th Congress (2007-2008), and 12 were published during the 111 th Congress (2009-2010), but these numbers should not be interpreted to reflect the entirety of hold activity that occurred during those two Congresses. Instead, they represent the subset of holds that activated the notification requirements established in Section 512 of P.L. 110-81 . Recall that notification is required when three conditions are met: (1) the majority or minority leader (or their designee) asks unanimous consent to proceed to or pass a measure or matter; (2) objection is raised on the basis of a colleague's hold letter; and (3) six days of session have elapsed since the objection was made. Many holds lodged during the 110 th and 111 th Congresses (2007-2010) are likely to have fallen outside the purview of Section 512 regulation. At least two reasons account for this. First, the new notification requirements would not apply to holds placed on measures or matters the Senate did not attempt to proceed to or pass (perhaps on account of an implicit filibuster threat contained in a hold letter). When scheduling business for floor consideration, the content and quantity of hold letters received on a particular measure or matter are likely to factor into the negotiations and considerations Senate leaders make. Rather than take action that could have the effect of vitiating the confidentiality of a holding Senator, Senate leaders might simply decide to advance other matters to the floor instead (or at least try to). A second reason the actual number of holds is likely to exceed the number published in the Record during these two Congresses has to do with the six session day window between an objection being raised and reporting requirements becoming mandatory. Designed to provide Senators with sufficient time to study an issue before deciding whether or not to maintain a hold beyond the six session day grace period, this provision may have encouraged the use of revolving (or rotating) holds. If one Senator removes his or her hold within six session days of activating the reporting requirement and another Senator puts a new hold in its place, the effect would be to reset the six session day clock each time a new hold was placed on a given measure or matter. In this way, two or more Senators could maintain the secrecy of their holds for an indefinite period without running afoul of the new disclosure procedures. In response to the limited applicability of Section 512, the Senate established--by a 92-4 vote on January 27, 2011--a standing order ( S.Res. 28 ) that extends notification requirements to a larger share of hold activity. Instead of a six day reporting window, S.Res. 28 provides two days of session during which Senators are expected to deliver their objection notices for publication. The action that triggers the reporting requirement also changed: from an objection on the basis of a colleague's hold request (under Section 512) to the initial transmission of a written objection notice to the party leader (under S.Res. 28 ). The proper language to communicate a hold remained largely the same as before, except that holding Senators must now include a statement that expressly authorizes their party leader to object to a unanimous consent request in their name. In the event that a Senator neglects to deliver an objection notice for publication within two session days and a party leader nevertheless raises objection on the basis of that hold, S.Res. 28 requires that the name of the objecting party leader be identified as the source of the hold in the "Notice of Intent to Object" section of the appropriate Senate calendar. The process of removing an objection notice from either calendar remains unchanged. During the 112 th Congress (2011-2012), a total of 24 objection notices were published in accordance with the provisions of S.Res. 28 . Nine notices were printed during the 113 th Congress (2013-2014), and 34 were published in the 114 th Congress (2015-2016). See Appendix C for an example of how these notices appear in the Congressional Record . As before, caution should be exercised when interpreting these numbers. What looks like a drop-off in the use of holds could instead reflect broader challenges inherent in efforts to regulate this kind of communication. Senate holds are predicated on the unanimous consent nature of Senate decision-making. The influence they exert in chamber deliberations is based primarily upon the significant parliamentary prerogatives individual Senators are afforded in the rules, procedures, and precedents of the chamber. As such, efforts to regulate holds are inextricably linked with the chamber's use of unanimous consent agreements to structure the process of calling up measures and matters for floor debate and amendment. While not all holds are intended to prevent the consideration of a particular measure, some do take that form, and Senate leaders justifiably perceive those correspondences as implicit filibuster threats. As agents of their party, Senate leaders value the information that holds provide regarding the policy and scheduling preferences of their colleagues. For this reason, rules changes that require enforcement on the part of Senate leaders--as both efforts discussed here do--tend to conflict with the managerial role played by contemporary Senate leaders and the expectation on the part of their colleagues that leaders will defend their interests in negotiations over the scheduling of measures and matters for floor consideration. A second challenge to hold regulation involves the nature of the transmission itself. Both recent proposals address a particular kind of communication: a letter written and delivered to a Senator's party leader that expresses some kind of reservation about the timing or merits of a particular proposal or nomination. Hold requests might be conveyed in less formal ways as well; in a telephone call to the leader's office, for instance, or in a verbal exchange that occurs on or off the Senate floor. An objection to a unanimous consent request transmitted through the "hotline" represents another common method of communicating preferences to Senate leaders. Some Senate offices have circulated "Dear Colleague" letters specifying certain requirements legislation must adhere to in order to avoid a hold being placed. It remains unclear, however, whether or not these alternative forms of communication fall within the purview of recent hold reforms. Appendix A. A Hold Letter Appendix B. The "Notice of Intent to Object" section of the Calendar of Business Appendix C. A Notice of Intent to Object

The Senate "hold" is an informal practice whereby Senators communicate to Senate leaders, often in the form of a letter, their policy views and scheduling preferences regarding measures and matters available for floor consideration. Unique to the upper chamber, holds can be understood as information-sharing devices predicated on the unanimous consent nature of Senate decision-making. Senators place holds to accomplish a variety of purposes--to receive notification of upcoming legislative proceedings, for instance, or to express objections to a particular proposal or executive nomination--but ultimately the decision to honor a hold request, and for how long, rests with the majority leader. Scheduling Senate business is the fundamental prerogative of the majority leader, and this responsibility is typically carried out in consultation with the minority leader. The influence that holds exert in chamber deliberations is based primarily upon the significant parliamentary prerogatives individual Senators are afforded in the rules, procedures, and precedents of the chamber. More often than not, Senate leaders honor a hold request because not doing so could trigger a range of parliamentary responses from the holding Senator(s), such as a filibuster, that could expend significant amounts of scarce floor time. As such, efforts to regulate holds are inextricably linked with the chamber's use of unanimous consent agreements to structure the process of calling up measures and matters for floor debate and amendment. In recent years the Senate has considered a variety of proposals that address the Senate hold, two of which the chamber adopted. Both sought to eliminate the secrecy of holds. Prior to these rules changes, hold letters were written with the expectation that their source and contents would remain private, even to other Senators. In 2007, the Senate adopted new procedures to make hold requests public in certain circumstances. Under Section 512 of the Honest Leadership and Open Government Act (P.L. 110-81), if objection was raised to a unanimous consent request to proceed to or pass a measure or matter on behalf of another Senator, then the Senator who originated the hold was expected to deliver for publication in the Congressional Record, within six session days of the objection, a "notice of intent to object" identifying the Senator as the source of the hold and the measure or matter to which it pertained. A process for removing a hold was also created, and a new "Notice of Intent to Object" section was added to both Senate calendars to take account of objection notices that remained outstanding. An examination of objection notices published since 2007 suggests that many hold requests are likely to have fallen outside the scope of Section 512 regulation. In an effort to make public a greater share of hold requests, the Senate adjusted its notification requirements by way of a standing order (S.Res. 28) adopted at the outset of the 112th Congress (2011-2012). Instead of the six session day reporting window specified in Section 512, S.Res. 28 provides two days of session during which Senators are expected to deliver their objection notices for publication. The action that triggers the reporting requirement also shifted: from an objection on the basis of a colleague's hold request (under Section 512) to the initial transmission of a written objection notice to the party leader (under S.Res. 28). In the event that a Senator neglects to deliver an objection notice for publication and a party leader nevertheless raises objection on the basis of that hold, S.Res. 28 requires that the name of the objecting party leader be identified as the source of the hold in the "Notice of Intent to Object" section of the appropriate Senate calendar.

Adults may go missing due to personal choice; an abduction or foul play; a physical or developmental disability; natural catastrophes that displace individuals, such as a hurricane; or certain high-risk behaviors, including gang involvement or drug use, among other circumstances. State and local laws govern how criminal justice entities respond to missing adult cases. This response is complicated by a number of factors. Unlike children, adults have the legal right to go missing in most cases and may do so to seek protection from a domestic abuser and other related reasons. Further, law enforcement agencies may be hesitant to devote resources to missing adult cases, given competing priorities. Law enforcement agencies within and across states also respond differently to missing adult cases. Some states require at least a 24-hour waiting period after the person is believed to be missing before a police report may be filed, while others take reports without a waiting period. The federal government has played a role in both (1) seeking to prevent certain types of missing adult incidents and (2) recovering adults who go missing, including those who are deceased and for whom only remains provide clues to their identity and circumstances surrounding their disappearance. Congress authorized the Missing Alzheimer's Disease Patient Alert program under the Violent Crime Control and Law Enforcement Act of 1994 ( P.L. 103-322 ) to assist in locating missing individuals with Alzheimer's disease and other forms of dementia through a patient identification program, as well as outreach and education efforts. This program was funded through FY2015. In 2000, Congress authorized the Department of Justice (DOJ), through Kristen's Act ( P.L. 106-468 ), to make grants to establish a national clearinghouse for missing adults and provide technical assistance to law enforcement agencies in locating missing adults. This grant was funded from FY2002 through FY2006. The federal government has also supported efforts to establish databases to track and identify missing adults, their relatives, and unidentified human remains. The first section of this report discusses demographics and record keeping of missing adults and unidentified remains, as well as some of the factors that may contribute to the disappearance of adults. This section also discusses federally funded databases that are used to track data on missing adults and unidentified individuals. The second section of the report describes the federal programs and initiatives to assist in locating missing adults, including funding data where applicable. Finally, the third section discusses issues about the federal role in missing adult cases. Certain circumstances can make adults vulnerable to going missing. Adults may go missing because of an abduction or foul play. A physical or developmental disability or cognitive disorder, such as Alzheimer's disease and other forms of dementia, may also contribute to a missing episode. Adults with dementia have been identified as high-risk for going missing by advocates for older adults. According to the Alzheimer's Association, a nonprofit organization that provides research on Alzheimer's disease, 5.5 million people in the United States suffer from Alzheimer's disease and related dementia, and about 60% of those will wander away from their homes or health care facilities. Further, a natural catastrophe can displace individuals and make their whereabouts unknown to others. Finally, other adults vulnerable to missing incidents may include those with high-risk lifestyles, such as individuals who abuse drugs or are gang involved, and those that have a history of victimization, including domestic violence. There is no definitive estimate of the number of adults who go missing, because some adults are not known to be missing or are not reported to databases that compile data on missing persons. However, three federally supported data sources provide some insight into this number: the Missing Person File at the FBI's National Crime Information Center (NCIC); the FBI's National DNA Index System (NDIS), which stores information on offenders and arrestees, forensic evidence, as well as individuals believed to be missing, their relatives, and unidentified human remains; and the National Missing and Unidentified Persons System (NamUs), administered by DOJ's National Institute of Justice (NIJ). Profiles of missing individuals entered into one database do not necessarily populate other databases, although some missing individuals may be reported to more than one of the databases. Therefore, numbers of missing persons should not be added across any of the databases. The NCIC Unidentified Person File, NamUs, and NDIS contain information about unidentified decedents, or remains. However, the true number of unidentified missing adult cases is unknown because remains can go undiscovered, or if they are recovered, they may not be reported to the databases or retained. In a census conducted by DOJ in 2004, medical examiners and coroners reported a total of 13,486 unidentified human remains on record, though about 51% of medical examiner and coroners' offices lacked policies for retaining records such as x-rays, DNA, or fingerprints that could identify missing individuals. (The report also found that 90% of offices serving large jurisdictions did retain such records.) Further, medical examiners and coroners estimated that about 4,400 unidentified human decedents were reported in an average year, with approximately 1,000 (23.0%) remaining unidentified after one year. Another DOJ study estimated, using death records reported to the Centers for Disease Control and Prevention from 1980 through 2004, that as many as 10,300 of these records were for unidentified decedents. This number is an approximation, as states do not uniformly specify on the death certificate when a person's identity is not known. In addition, the criteria used by DOJ to search the death records may have included individuals whose identities were known, as well as unidentified individuals who were later identified. The discussion in the next section will show that the databases range in the number of profiles they contain, as well as the type of information they collect, such as basic demographic profiles, DNA profiles, etc. ( Note that only the data on missing persons and unidentified decedents, as reported in NCIC, are regularly updated in this report .) The NCIC within the FBI's Criminal Justice Information Services (CJIS) Division maintains statistics on missing adults and unidentified decedents. The NCIC is a computerized index of documented information concerning crimes and criminals of nationwide interest and a locator file for missing and unidentified persons. Since October 1, 1975, the NCIC has maintained records of missing persons (known as the Missing Person File) who are reported to the FBI by federal, state, and local law enforcement agencies; foreign criminal justice agencies; and authorized courts. The Missing Person File was created in response to a request in 1974 from the NCIC Advisory Policy Board (APB). The APB is composed of local, state, and federal criminal justice and national security agencies, and it advises the FBI on criminal justice information matters. The Missing Person File includes records for individuals who are missing because they have a proven physical or mental disability, are missing under circumstances indicating that they may be in physical danger, are missing under circumstances indicating their disappearance may not have been voluntary, are under the age of 21 and do not meet the above criteria, are missing after a catastrophe, or are 21 and older and do not meet any of the above criteria but for whom there is a reasonable concern for their safety. These categories are presented in further detail in Table A-1 . Pursuant to the National Child Search Assistance Act of 1990 (Title XXXVII of the Crime Control Act of 1990, P.L. 101-647 ), records of missing children under age 18 must be immediately entered into the Missing Person File. The act also requires the Attorney General to publish an annual statistical summary of the Missing Person File. Suzanne's Law, enacted by the Prosecutorial Remedies and Other Tools to End the Exploitation of Children Today Act of 2003 (PROTECT Act, P.L. 108-21 ), requires law enforcement to also immediately submit information about missing adults to the NCIC ages 18 through 20. Law enforcement agencies are not mandated under federal law to submit missing person records of adults over the age of 21 into the Missing Person File. Although records of missing adults are captured, the NCIC does not include the complete number of adults who go missing and are not reported to the database. As of December 31, 2016, there were 88,040 individual records (entered in 2016 and previous years) remaining in the Missing Person File. Of these, 54,334 (61.7%) were for missing adults ages 18 and older and 33,052 (38.3%) were for children ages 17 and younger. In calendar year 2016, over 647,000 (647,435) individuals of all ages were reported missing to the NCIC. Of all individuals reported missing in 2016, a total of 181,759 (28.1%) were ages 18 and older. Also in 2016, nearly 585,000 missing person records were cleared or canceled; some of these records were entered prior to 2016. Table A-1 summarizes the number of missing cases entered in 2012 through 2016 for individuals ages 18 and older under the six missing person categories listed previously. The highest number of missing adults went missing for an unspecified reason, but there was a reasonable concern for their safety. Of all adults age 18 and older who were reported missing in 2016, most were male (59.1%). The majority of missing adults were white (66.0%), followed by individuals who were black (26.6%), of an unknown race (3.0%), Asian (3.1%), and American Indian or Alaskan Native (1.3%). Relative to their share of the population generally, missing white and Asian adults appear to be underrepresented and missing African American adults appear to be overrepresented. The NCIC does not report on the Hispanic origin of missing individuals, and NCIC users are instructed to enter records for Hispanic individuals using the race code (American Indian or Alaskan Native, Asian or Pacific Islander, black, or white) that most closely represents that individual as perceived by the law enforcement official. Some individuals who go missing may be deceased, and their remains, intact or not, may be the only available clues concerning their identity and circumstances surrounding their disappearance. Since 1983, the NCIC has taken reports of unidentified missing persons, pursuant to the passage of the Missing Children Act of 1982 ( P.L. 97-292 ). The act required the FBI to "acquire, collect, classify, and preserve any information which would assist in the identification of any deceased individual who has not been identified after the discovery of such deceased individual." Pursuant to this requirement, the NCIC's Unidentified Remains File was established to take reports of unidentified deceased persons, persons of any age who are living and unable to determine their identity, and unidentified catastrophe victims. Reports may include information about bodies found shortly after death, when a person's remains may be fairly intact, as well as skeletal remains. For those individuals who are living and their identities are unknown, information entered about their appearances could help in reuniting them with relatives. The total number of unidentified persons in the NCIC may represent just a fraction of the true number of missing remains. As of December 31, 2016, the Unidentified Remains File included 8,431 unidentified persons. During 2015, nearly 900 unidentified person records were entered into NCIC. Of those, about 80% were for deceased unidentified bodies; less than 1% was for unidentified victims of catastrophes; and approximately 19% were for living persons who could not be identified because they could not identify themselves (e.g., an individual with amnesia, infant). Another database operated by the FBI stores DNA records, including for missing adults and unidentified remains, and was authorized under the DNA Identification Act of 1994 as part the Violent Crime Control and Law Enforcement Act of 1994 ( P.L. 103-322 ). This database is known as NDIS. P.L. 103-322 specified that the FBI could establish an index of DNA identification records of persons convicted of crimes, analyses of DNA samples recovered from crime scenes, and analyses from unidentified human remains. A fourth category of records for relatives of missing persons was added in 1999 by the Consolidated Appropriations Act of 2000 ( P.L. 106-113 ). DNA laboratories may enter DNA information into NDIS that involves one of the four categories of records, as well as the records of missing adults. The data are first entered by authorized users into the Local DNA Index System (LDIS), which can then populate the central laboratory for each state, known as a State DNA Index System (SDIS). Only SDIS laboratories may upload DNA profiles directly to the NDIS. LDIS or SDIS laboratories can conduct searches of their own databases prior to uploading the data to NDIS. Searches of data entered by other states into NDIS are conducted by the FBI Laboratory, which automatically searches new DNA data when profiles are submitted by the states. NDIS contains approximately 15 million profiles in the five databases: offenders and arrestees database, forensic evidence database, missing unidentified human remains database, missing person database, and biological relatives of missing persons database. Most of the DNA profiles are those stored in the criminal and forensic evidence databases. The three missing person databases are part of the FBI Laboratory's National Missing Person DNA Database (NMPDD) program, which works to identify missing and unidentified persons based on available DNA profiles and other clues. The unidentified human remains database contains DNA profiles from the remains of individuals that cannot be identified by fingerprint; dental, medical, or anthropological examinations; and of individuals who are living, but are unidentifiable using typical investigative methods (e.g., children and others who cannot or refuse to identify themselves). The relatives of missing persons database contains DNA profiles that are voluntarily submitted by the relatives of known missing individuals. Finally, the missing person database contains DNA records of missing persons obtained from their belongings or derived from the profiles of their relatives. The three missing person databases can be searched against one another. The Combined DNA Index System (CODIS) is the software in NDIS that compares various DNA profiles, and if a match is made between two sets of DNA profiles, the software sends an electronic message to the laboratories that contributed the samples. DNA analysts at the laboratories review the data to confirm the match. The laboratories are responsible for alerting the investigating law enforcement agency, medical examiner, coroner, or medical-legal authority of the results. The FBI is continuing to develop technology, including software to conduct kinship DNA analyses, and is using metadata (e.g., sex, date of last sighting, and age) that is intended to assist in locating missing persons. The National Missing and Unidentified Persons System (NamUs) is an online repository for information about missing persons and unidentified remains that is overseen by DOJ's National Institute of Justice (NIJ). According to DOJ, NamUs was established in response to an overwhelming need for a central reporting system for unidentified human remains cases. In 2005, DOJ's National Institute of Justice convened stakeholders--medical examiners, coroners, law enforcement personnel, managers of state missing children clearinghouses, family members of missing persons, forensic scientists, and policymakers--for a national strategy meeting called the "Identifying the Missing Summit." The summit focused on the challenges in investigating and solving missing person cases. After the summit, work began on the development of the online repository. To further work on the feasibility of a database, DOJ appointed an expert panel of medical examiners and coroners, which ultimately confirmed the need for a central reporting system for unidentified human remains. These efforts also led DOJ to establish and fund NamUs. NamUs is composed of three databases: missing persons, unidentified remains, and unclaimed remains. The system has been accessible via the web since 2009 , and is operated through an NIJ grant to the University of North Texas (UNT) Health Center . NamUs users, including members of the public, can search across databases in an effort to identify unidentified human remains and solve missing person cases. Funding has been provided at $2.4 million in FY2016 ( P.L. 114-113 ) and FY2017 ( P.L. 115-31 ) for the "operationalization, maintenance, and expansion" of the system. NIJ has provided funding in previous years through appropriations for "DNA and other forensics." The missing person database serves as a repository for information on missing persons that can be entered by law enforcement agencies or members of the public. Profiles of missing individuals may include photographs and information about the circumstances around their disappearance, their dental records, DNA, physical appearance, and police contact information, among other items. Users of the website may search the database based on these attributes. The database also includes information about state statutes on recovering missing persons as well as links to state missing person clearinghouses, which are maintained by state law enforcement agencies or advocacy organizations and provide information about missing adults. The unidentified remains database is available for medical examiners and coroners to upload their cases. Website users may view profiles of the unidentified remains; however, only law enforcement agencies and other authorized entities may enter information and review additional information and photographs that are not available to the public. Some of the profiles cover remains that are fully intact, whereas others include pieces of the missing person's body or information about the remains and where they were found. Website users can also search based on characteristics such as demographics, anthropologic analysis, the NCIC record number, dental information, and distinct body features. The unclaimed remains database is available for medical examiners and coroners to upload profiles of deceased individuals who have been identified by name, but for whom no family members have been identified or located to claim the body. NamUs automatically performs comparisons of the various databases to determine matches or similarities between profiles of missing persons, unidentified persons, or unclaimed remains. Records of missing persons or unidentified remains are submitted to most of the databases by authorized law enforcement agencies, state missing persons clearinghouses, medical examiners and coroners, or DNA laboratories. All of the databases can be accessed only by the federal government or authorized law enforcement and other personnel; however, records in NamUs and the NCMA database can also be reviewed by the public, though sometimes only on a limited basis for NamUs. Table A-2 summarizes some of the features of the databases as well as others that store records of missing persons and unidentified remains. In recent years, the federal government has played a role both in preventing certain types of missing adult incidents and in working to recover adults who go missing, including those who are deceased and for whom only remains provide clues to the circumstances surrounding their disappearance. In addition to funding or operating databases that track information about missing adults and unidentified remains, the federal government has undertaken other related efforts, including some that are no longer funded. These efforts are (1) the DNA Initiative, created under President George W. Bush, which focused on identifying the remains of unidentified deceased individuals; (2) National Missing Persons Task Force, with its emphasis on achieving greater cooperation among the various federal databases; (3) the Missing Alzheimer's Disease Patient Alert program to prevent missing episodes and locate missing individuals with Alzheimer's disease and related dementia; (4) activities funded under Kristen's Act to locate missing adults; and (5) the National Center for Missing and Exploited Children (NCMEC), which works to recover missing children and adults ages 18 to 21 who are reported to the agency as missing by law enforcement officials. The Missing Alzheimer's Disease Patient Alert program and activities funded under Kristen's Act have specifically received congressional appropriations for missing adult activities. The other activities have been funded under appropriations for initiatives or programs that encompass activities other than just those for missing adults. In March 2003, President George W. Bush announced a new DNA Initiative to promote the use of forensic DNA technology to solve crimes, protect individuals from wrongful prosecution, and identify missing persons. Funding was provided under the initiative from FY2004 through FY2008. Within the past several years, Congress has appropriated funding to DOJ to carry out the following activities to assist with locating missing adults and unidentified remains: sample analysis of unidentified human remains and family reference samples; standardized sample DNA collection kits for unidentified remains of missing persons; evaluation and implementation of advanced DNA technologies to facilitate the analysis of skeletal remains; focus group on using DNA technology to assist the identification of human remains; training and technical assistance on using DNA to identify missing persons and unidentified remains; census of medical examiners and coroners and inventory of unidentified remains; and NamUs databases. As part of the DNA Initiative, in 2005, NIJ and FBI were directed by DOJ leadership to establish a national task force to assess how to better encourage, facilitate, and achieve greater use of federal missing person databases to solve missing persons cases and identify human remains. In response to this directive, NIJ and the FBI convened the National Missing Persons Taskforce, composed of a broad cross-section of criminal justice officials, forensic science experts, and victim advocates. The task force met July 2005 through January 2006 to address, among other issues, the federal databases that store information on missing persons and unidentified human remains. According to DOJ, members of the task force convened these meetings to better understand and improve the information sharing tools and DNA technologies available to solve cases involving missing persons and unidentified decedents. The task force also created model state legislation to encourage states to adopt laws that improve the ability of law enforcement to locate and return missing persons, identify human remains, and provide timely information to family members of missing persons. The Violent Crime Control and Law Enforcement Act of 1994 ( P.L. 103-322 ) authorized the Missing Alzheimer's Disease Patient Alert program to provide grants to locally based organizations to protect and locate missing individuals with Alzheimer's disease and related dementia. Such individuals may be unable to think clearly; to recognize persons and landmarks; or to react rationally under normal circumstances. Those with Alzheimer's disease and dementia tend to hide or seclude themselves when they are in unfamiliar and disorienting situations. About 60% of missing persons with Alzheimer's disease and dementia who were found were located within the first 6 hours of going missing and about 30% within 6 to 12 hours. Funding was authorized for the program at $900,000 for each of FY1996, FY1997, and FY1998. Congress appropriated funding for the program from FY1996 through FY2015. Annual funding ranged from $750,000 to $2.0 million. Funding was not appropriated in FY2016 and FY2017. The program is administered by DOJ's Bureau of Justice Assistance (BJA) within the Office of Justice Programs. Funding under the program has been awarded to a variety of entities, including the International Association of Chiefs of Police (IACP), Alzheimer's Association, MedicAlert Foundation Project Lifesaver, and universities. For example, IACP has used these funds to develop its Alzheimer's Initiative program. The program seeks to increase awareness among law enforcement agencies and the public in addressing the needs of missing persons with Alzheimer's disease. Their website provides a clearinghouse of information and resources for those who may come across missing persons, including a guide to state alert systems for missing seniors and adults. In addition, IACP provides training for public safety administrators, law enforcement officers, and others from the first responder community with training on Alzheimer's and dementia. BJA awarded funds through the Missing Alzheimer's Disease Patient Alert program to the Alzheimer's Association from FY1996 through 2015. These funds were used to establish and carry out the MedicAlert®️ + Alzheimer's Association Safe Return Program. The program is a nationwide emergency response service for individuals with Alzheimer's or a related dementia who wander or have a medical emergency. Enrollees receive a bracelet indicating that the individual is memory impaired and including a toll-free, 24-hour emergency response number to call if the person is found wandering or has a medical emergency. In 2000, Congress passed Kristen's Act ( P.L. 106-468 ), named after Kristen Modafferi, who has been missing since 1997. Kristen was 18 when she disappeared and her family was unable to access services through the National Center for Missing and Exploited Children (NCMEC) because, at the time, the organization only provided assistance to missing incident cases for children under age 18. NCMEC now provides services for missing young adults ages 18 to 21, pursuant to Suzanne's Law, which requires law enforcement to also immediately submit information about missing adults ages 18 through 20 to the NCIC. Kristen's Act authorized $1 million in funding for each of FY2001 to FY2004 and permitted the Attorney General to make grants to assist law enforcement agencies in locating missing adults; maintain a database for tracking adults believed by law enforcement to be endangered due to age, diminished mental capacity, and possible foul play; maintain statistical information on missing adults; provide resources and referrals to the families of missing adults; and establish and maintain a national clearinghouse for missing adults. Kristen's Act grants were made from FY2002 through FY2006 through the Edward Byrne Discretionary Grant Program to the National Center for Missing Adults (NCMA), though funding authorization expired at the end of FY2004. Funding levels ranged from $150,000 to $1.7 million. NCMA began in 1995 as the missing adult division of the Nation's Missing Children Organization. NCMA received funding under Kristen's Act to expand its efforts to recover missing adults beginning in FY2002 and received this funding through FY2006. The organization merged with Let's Bring Them Home, a nonprofit organization that provides education and resources on missing persons. The National Center for Missing and Exploited Children is a primary component of the federally funded Missing and Exploited Children's Program. Although NCMEC's mission is to recover missing children under age 18, it also provides services for missing young adults ages 18 through 20, pursuant to Suzanne's Law, which requires law enforcement to also immediately submit information about missing adults to the NCIC ages 18 through 20. This law changed the upper age limit of individuals who must be entered into the NCIC. NCMEC processes young adult cases differently than cases for missing children. NCMEC will accept a young adult case only if it is reported by a law enforcement entity--and not by parents, spouses, partners, or others--because the organization relies on law enforcement personnel to verify that the young adult is missing due to foul play or other reasons that would cause concern about the individual's whereabouts, such as diminished mental capacity. NCMEC then assists in recovery efforts for these adults as it would for children under age 18. A case manager in the Missing Children's Division is assigned to serve as the single point of contact for the searching family and to provide technical assistance to locate abductors and recover missing children and young adults. Federal and state policymakers and other stakeholders have increasingly focused on three issues related to adults who go missing: (1) coordinating databases on missing persons; and (2) assisting states with building the capacity to develop both alert systems to inform the public about missing older adults and technology to recover these individuals. The first section of this report discussed the various federally funded databases that store information on missing persons and unidentified decedents. These databases do not currently populate one another, although some of the databases indicate whether information about a particular individual is available in another database. This limitation raises the question about whether the federal government can and should develop technology to enable the databases to coordinate, although concerns about privacy and funding would likely need to be addressed. Alert systems, known as Silver or Senior Alerts, have been established in multiple states. These alert systems were created out of concern for the safety of seniors and other at-risk adult populations who are prone to wandering due to a physical or cognitive disability or medical condition such as Alzheimer's or other forms of dementia. Some missing adult alert programs are modeled after the states' AMBER Alert system for abducted children. Issuing alerts to law enforcement agencies and the public for missing vulnerable adults in some the states appears to be at the discretion of the law enforcement agency--local or state or both--and is not required of the agency. In addition, state alert systems vary in terms of the target population for issuing an alert (i.e., older adults with dementia versus any adult with a disability). Most law enforcement agencies have the ability to disseminate the alert to law enforcement agencies and media in the local area, region, statewide, and other states. For example, the Texas Division of Emergency Management disseminates information within the alert advisory area to local, state, and federal law enforcement agencies; primary media outlets; the Texas Department of Transportation; the Texas Lottery Commission; and the Independent Bankers Association of Texas. Some stakeholders have raised concerns that alert systems may not be useful for some adults who go missing. For example, the media repeatedly reporting missing adult cases could desensitize the public to the issue of wandering. In addition, missing persons may not be found in a place that is well-trafficked. Among missing persons with Alzheimer's Disease, about three-quarters leave on foot; and of those found alive, about half are found 1 to 5 miles from where they originated. For these reasons, policymakers may wish to consider Silver Alerts in combination with a combination of other policy approaches. Further, some stakeholders have raised concerns that broadcasting information about missing adults can infringe on their rights to privacy. Unlike incidents involving the AMBER Alert program, which was established to alert law enforcement and the public when a child is missing and criminal activity may be involved, it is not a crime for an adult to wander from home or purposely go missing. The stakeholders assert that states should have criteria for activating an alert that limits disclosure of information to the public only when it is absolutely necessary to preserve the missing person's life. They also assert that disclosure of this information should be reserved to the most limited geographic area possible. Further, concerns have been raised that having only selected criteria for the alert may be short-sighted. For example, some have argued that making age the primary factor for issuing an alert overlooks the possibility that age alone does not necessarily signal whether a person is endangered. Another consideration is the extent to which information about a missing person's health background can be broadcast to the public. The Health Insurance Portability and Accountability Act (HIPAA) Health Privacy Rule--the federal rule that regulates the use or disclosure of protected health information--limits disclosure of health information by health care providers. In 2011, DOJ published a guide to assist states and communities in developing or enhancing what DOJ calls an Endangered Missing Advisory (EMA), or an advisory for individuals who do not meet the AMBER Alert criteria established by DOJ. The guide suggests that EMAs can be issued for missing adults, or for children while law enforcement determines whether a case meets the AMBER Alert criteria. The guide outlines the steps states and communities can take in developing an EMA plan, including creating a task force--comprised of key AMBER Alert stakeholders, broadcasters and other representatives from the media, and law enforcement, among others--that can establish criteria and procedures for the EMA and oversee its operation and effectiveness. The guide suggests that adults may benefit from a different type of alert system than AMBER Alert, and that task forces should determine which elements of the AMBER Alert plan should be used to activate an EMA. Still, some states with alert systems could have difficulty coordinating with another state that lacks a similar system. States could also have challenges coordinating with states that have alert systems with different criteria for activating an alert. Although state and local governments have taken the lead in implementing alert systems, the federal government could play a role in coordinating efforts when a missing individual is believed to have crossed state lines as well as assist in the development of formal agreements or protocols for the use of interstate alerts. The federal government could model any policies to coordinate across state lines on the AMBER Alert program, which provides training and technical assistance to states on a number of issues related to abducted children. This training addresses how jurisdictions, including those in different states, can work together to recover children who are abducted, among other topics. Through conference and training exercises, state AMBER Alert coordinators, state and local law enforcement agencies, and other stakeholders have opportunities to meet and exchange ideas, which may further facilitate coordination. Electronic monitoring services for individuals who are susceptible to going missing are being implemented. One such electronic monitoring program is used by some state and local law enforcement agencies with technology developed by Project Lifesaver International, a nonprofit organization that administers the Project Lifesaver program and has received funding under the Missing Alzheimer's Disease Patient Alert program. Project Lifesaver uses a personalized wristband that emits a signal to track individuals prone to going missing. The wristband is worn by the clients continuously, and each month, a law enforcement officer or trained volunteer visits with the clients to replace the wristband batteries and provide referrals to clients and their caregivers in need of social services. When family members or caregivers report to the designated Project Lifesaver agency--typically a local law enforcement or first responder agency--that the client is missing, a search and rescue team responds to the wanderer's area to search using a mobile locator tracking system. Project Lifesaver grew out of local law enforcement experience with search and rescue efforts for missing persons with Alzheimer's and other forms of dementia. The target population of the program has expanded to include children with special needs such as autism and Down's syndrome and to anyone else that may be at risk of wandering for a medical reason. In addition to providing the technology, the program trains the designated agency to communicate with persons with Alzheimer's disease and other disorders. Project Lifesaver International reports that the tracking technology is used by hundreds of law enforcement agencies in nearly all states and the District of Columbia. According to Project Lifesaver International, the benefits from the program include saving law enforcement and search and rescue response time and resources in locating missing persons due to wandering. The Alzheimer's Association also has a program, known as Comfort Zone, that uses tracking technology. The program is a web application that includes a location-based mapping service. The enrolled individual carries a tracking device with global positioning system (GPS) technology. Caretakers can track the individual's whereabouts via a secure online website through the Alzheimer's Association. The website includes a map with addresses of the vicinity in which the person is located. Caretakers can also receive alerts and notifications of the individual's whereabouts, such as when the individual leaves a specified radius (e.g., beyond their house or some other location). Tracking technology raises questions about the rights to privacy and autonomy of individuals who are enrolled. These organizations appear to have taken steps to ensure that enrolled participants meet the eligibility criteria and to secure the consent of the enrolled individual, where possible. For individuals who participate in Project Lifesaver, consent usually comes from a caregiver having legal responsibility for the individual. In rare cases, the individual gives consent. Individuals enrolled in Comfort Zone give consent to be enrolled, and in some cases the caregiver with legal responsibility gives consent. According to the Alzheimer's Association, the program is ideally for individuals with early stages of dementia.

Adults may go missing due to personal choice, an abduction, foul play, a mental or physical disability, or a natural catastrophe, among other reasons. Although no accurate estimates exist of the number of missing adults, the Federal Bureau of Investigation (FBI) reported that as of December 31, 2016, approximately 54,000 cases of missing adults (age 18 and older) were pending in the National Crime Information Center (NCIC) system, a federal computerized index with data on crimes and locator files for missing and unidentified persons. Certain adults are particularly vulnerable to missing episodes; for example, those with dementia are at risk for becoming disoriented while engaged in a routine activity and may not be able to determine where they are or get to where they should be. Adults who engage in high-risk behaviors, including involvement in gang activity, may also be more prone to going missing. Unlike children, adults have the legal right to go missing under most circumstances. As a result, families of missing adults may receive limited assistance from state and local law enforcement entities in recovering their loved ones. The federal government has not been involved in assisting law enforcement entities with missing adult cases in the same way it has with missing children cases. Further, cases of missing children and young adults under the age of 21 must be reported to the NCIC, while reporting missing adults to the database is voluntary. In recent years, however, the federal government has increasingly played a role in (1) preventing certain types of missing adult incidents; (2) working to recover adults who go missing, including those who are deceased and for whom only remains can be found; and (3) supporting databases, including NCIC, that maintain records of missing adults and unidentified remains. Recognizing the needs of a growing aging population, Congress authorized funding for the Missing Alzheimer's Disease Patient Alert program under the Violent Crime Control and Law Enforcement Act of 1994 (P.L. 103-322). The purpose of the program is to locate and respond to those with Alzheimer's and dementia who go missing. Congress provided appropriations for the program of $750,000 to $2 million annually from FY1996 through FY2015. No funding was appropriated for FY2016 or FY2017. Grants had been awarded under the program to a variety of entities, including the International Association of Chiefs of Police (IACP), Alzheimer's Association, Project Lifesaver, and universities. In 2000, Congress passed Kristen's Act (P.L. 106-468) to authorize the Department of Justice (DOJ) to make grants to establish a national clearinghouse for missing adults and provide technical assistance to law enforcement agencies in locating these individuals. From FY2002 through FY2006, DOJ made grants for these purposes. In addition, the federal DNA Initiative has also supported efforts to recover missing persons and identify unidentified human remains by funding DNA analysis and related assistance. In addition to the NCIC, the federal government maintains the National DNA Index System (NDIS), which stores criminal information as well as information on individuals believed to be missing, their relatives, and unidentified human remains; and the National Missing and Unidentified Persons System (NamUs), which includes databases for missing adults and unidentified remains. Records are submitted to most of the databases by law enforcement agencies, state missing persons clearinghouses, medical examiners and coroners, or DNA laboratories. The NDIS, NamUs, and NCIC databases can be accessed only by authorized law enforcement and other personnel; however, records in NamUs can also be reviewed by the public. Policymakers and other stakeholders have increasingly focused on the coordination of the federal databases on missing persons, as well as the role of the federal government in providing assistance to states and localities to develop alert systems and technology to locate missing adults. Many states have developed alert systems to recover vulnerable adults who have gone missing.

The number of foreign-born people residing in the United States is at the highest level in U.S. history and has reached a proportion of the U.S. population--12.6%--not seen since the early 20 th century. Of the 38 million foreign-born residents in the United States, approximately 16.4 million are naturalized citizens. According to the latest estimates by the Department of Homeland Security (DHS), about 10.8 million unauthorized aliens were living in the United States in January 2009. The Pew Hispanic Center recently reported an estimate of 11.1 million unauthorized aliens in March 2009, down from a peak of 12 million in March 2007. Some observers and policy experts maintain that the presence of an estimated 11 million unauthorized residents is evidence of flaws in the legal immigration system as well as failures of immigration control policies and practices. There is, indeed, a broad-based consensus that the U.S. immigration system is broken. This consensus erodes, however, as soon as the options to reform the U.S. immigration system are debated. Substantial efforts to reform immigration law have failed in the recent past, prompting some to characterize the issue as a "zero-sum game" or a "third rail." The thorniest of these immigration issues centers on policies directed toward unauthorized aliens in the United States. Although the economy appears to be recovering from the recession and some economic indicators suggest that growth has resumed, unemployment remains high and is projected to remain so for some time. Historically, international migration ebbs during economic crises (e.g., immigration to the United States was at its lowest levels during the Great Depression). While preliminary statistical trends suggest a slowing of migration pressures, it remains unclear how the current economic climate will affect immigration to the United States. Whether the Congress will act to alter immigration policies--either in the form of comprehensive immigration reform or in the form of incremental revisions aimed at strategic changes--is at the crux of the debate. Addressing these contentious policy reforms against the backdrop of economic turbulence sharpens the social and business cleavages and may narrow the range of options. This report synthesizes the following components of the reform debate: legal immigration; legalization; immigration control; refugees, asylees, and humanitarian migrants; and alien rights, benefits, and responsibilities; and offers a roadmap to other Congressional Research Service reports that more fully analyze the policy options. The challenge inherent in this policy issue is balancing employers' hopes to have access to a supply of legally present foreign workers, families' longing to reunite and live together, and a widely-shared wish among the stakeholders to improve the policies governing legal immigration into the country. The scope of this issue includes temporary admissions (e.g., guest workers, foreign students) and permanent admissions (e.g. employment-based, family-based immigrants). Four major principles underlie current U.S. policy on permanent immigration: the reunification of families, the admission of immigrants with needed skills, the protection of refugees, and the diversity of admissions by country of origin. The Immigration and Nationality Act (INA) specifies a complex set of numerical limits and preference categories that give priorities for permanent immigration reflecting these principles. Legal permanent residents (LPRs) refer to foreign nationals who live lawfully and permanently in the United States. Although the INA establishes a worldwide level of permanent admission at 675,000 annually, it allows for admission beyond these limits. The family-based level of LPR admissions is set at 480,000 annually, but immediate relatives of U.S. citizens may enter in a number that exceeds the statutory caps. The INA also provides a floor of 226,000 annually for the other categories of family-based LPRs. The statutory limit on employment-based LPRs is 140,000 annually. Each year, the INA allocates 55,000 for diversity visas to LPRs from countries underrepresented in the family and employment preference categories. The INA establishes per-country levels at 7% of the worldwide level. For a dependent foreign state, the per-country ceiling is 2%. During FY2009, a total of 1.1 million aliens became LPRs in the United States. Of this total, 66.1% entered on the basis of family ties. Immediate relatives of U.S. citizens made up the single largest group of immigrants--535,554--in FY2009. Other major categories in FY2009 were employment-based LPRs (including spouses and children) and refugees/asylees adjusting to LPR status--12.7% and 15.7%, respectively. A variety of constituencies are advocating a significant reallocation from the family-based to the employment-based visa categories or a substantial increase in legal immigration to meet a growing demand from families and employers in the United States for visas. Even as U.S. unemployment levels rise, employers assert that they continue to need the "best and the brightest" workers, regardless of their country of birth, to remain competitive in a worldwide market and to keep their firms in the United States. While support for the option of increasing employment based immigration may be dampened by the economic recession, proponents argue it is an essential ingredient for economic growth. Proponents of family-based migration alternatively point to the significant backlogs in family based immigration due to the sheer volume of aliens eligible to immigrate to the United States and maintain that any proposal to increase immigration levels should also include the option of family-based backlog reduction. Citizens and LPRs often wait years for their relatives' petitions to be processed and visa numbers to become available. Against these competing priorities for increased immigration are those who offer options to scale back immigration levels, with options ranging from limiting family-based LPRs to the immediate relatives of U.S. citizens to confining employment-based LPRs to exceptional, extraordinary or outstanding individuals. Legislation aimed at eliminating the diversity visa lottery arises as well. The INA provides for the temporary admission of various categories of foreign nationals, who are known as nonimmigrants. Nonimmigrants are admitted for a temporary period of time and a specific purpose. They include a wide range of visitors, including tourists, students, and temporary workers. Among the temporary worker provisions are the H-1B visa for professional specialty workers, the H-2A visa for agricultural workers, and the H-2B visa for nonagricultural workers. Foreign nationals also may be temporarily admitted to the United States for employment-related purposes under other categories, including the B-1 visa for business visitors, the E visa for treaty traders and investors, J visas for cultural exchange, and the L-1 visa for intracompany transfers. Some business people express concern that a scarcity of labor in certain sectors may curtail the pace of economic growth at a time when encouraging economic growth is paramount. A leading legislative response to skills mismatches is to increase the supply of temporary foreign workers (rather than importing permanent workers). While the demand for more skilled and highly-trained foreign workers garners much of the attention (e.g., lifting the ceiling on H-1B visas or set-asides of visas for foreign graduates of U.S. universities), pressure to increase unskilled temporary foreign workers, commonly referred to as guest workers, also remains. Those opposing increases in temporary workers assert that there is no compelling evidence of labor shortages and cite the growing rate of unemployment. Opponents argue that continuing temporary foreign workers programs during an economic recession would have a deleterious effect on salaries, compensation, and working conditions of U.S. workers. Most recently, some are suggesting that temporary foreign workers visas should be scaled back or placed in moratorium during the economic recession. The debate over legal immigration reform is complicated by proposals to enable unauthorized aliens residing in the United States to become LPRs, (commonly termed amnesty" by opponents and earned legalization by supporters). There are a range of options being offered, and these alternatives generally require unauthorized aliens to meet specified conditions and terms as well as pay penalty fees to legalize their status. Examples would include documenting physical presence in the United States over a specified period; demonstrating employment for specified periods; showing payment of income taxes; or leaving the United States to obtain the legal status. Using a point system that credits aliens with equities in the United States (e.g., work history, tax records, and family ties) would be another possible option. Other avenues for legalization would be guest worker visas tailored for unauthorized aliens in the United States or a legalization program that would replace guest worker visas. There are also options (commonly referred to as the DREAM Act) that would enable some unauthorized alien students to become LPRs through an immigration procedure known as cancellation of removal. Advocates for these legalization avenues maintain that unauthorized residents are working, paying taxes, and contributing to the community. Some also point out that legalization would provide employers with a substantially increased legal workforce without importing additional foreign workers. Opponents maintain that legalization rewards illegal actions at the expense of potential immigrants who are waiting to come legally. They further argue that it would serve as a magnet for future flows of unauthorized migrants. Reassessing immigration control policies and agencies and considering options for more effective enforcement of the INA are integral to immigration reform. Immigration control encompasses an array of enforcement tools, policies, and practices to prevent and investigate violations of immigration laws. The spectrum of enforcement issues ranges from visa policy at consular posts abroad and border security along the country's perimeter, to the apprehension, detention, and removal of unauthorized aliens in the interior of the country. If the flow of unauthorized migrants is abating during the economic recession, some may seek to divert resources from immigration control activities to other areas. Illustrative among these issues that might arise in the 111 th Congress are border security, worksite enforcement, document fraud, criminal aliens and the grounds for inadmissibility. Border security involves securing the many means by which people and goods enter the country. Operationally, this means controlling the official ports of entry through which legitimate travelers and commerce enter the country, and patrolling the nation's land and maritime borders to interdict illegal entries. In recent years, Congress has passed a series of provisions and funding streams aimed at strengthening immigration-related border security. Border Patrol apprehensions of unauthorized migrants along the southern border in 2008 were reportedly at the lowest level since the 1970's, with competing credit given to the economic crisis and to increased border control and enforcement. One flashpoint of this debate is the construction of a "virtual fence" as well as physical barriers along the border. P.L. 111-230 provides $600 million for emergency border security funding in supplemental FY2010 appropriations. Whether additional changes are needed to further control the border remains a question. For two decades it has been unlawful for an employer to knowingly hire, recruit or refer for a fee, or continue to employ an alien who is not authorized to be so employed. The large number of unauthorized aliens in the United States, the majority of whom are in the labor force, led many to criticize the adequacy of the current worksite enforcement measures. In response, highly visible worksite raids by the U.S. Department of Homeland Security's (DHS) Immigration and Customs Enforcement (ICE) bureau during 2007-2008 have sparked praise among some and alarm among others. Critics of the ICE worksite raids assert that the government is targeting low-wage foreign workers rather than the employers who hire them. Former DHS Secretary Michael Chertoff argued, however, that cases against supervisors and employers often depend on proving knowledge and intent, making it more difficult to build a criminal case against an employer. Efforts to strengthen worksite enforcement, however, are sometimes met by fears that more stringent penalties may inadvertently foster discrimination against legal workers with foreign appearances. DHS Secretary Janet Napolitano called for a thorough review, specifically requesting ICE agents to apply more scrutiny to the selection and investigation of worksite raids, which might be signaling a policy shift. All employers are required to participate in a paper-based employment eligibility verification system in which they examine documents presented by every new hire to verify the person's identity and work eligibility. Employers also may opt to participate in an electronic employment eligibility verification program, known as E-Verify, which checks the new hires' employment authorization through Social Security Administration and, if necessary, DHS databases. Employer organizations have long complained that E-Verify is too costly and poses practical and technical problems. Other critics maintain its expansion would make applying for jobs a hassle for all U.S. citizens and would effectively deny some law-abiding individuals the ability to work. According to DHS, however, E-Verify immediately verifies almost everyone who is authorized to work in the United States. DHS further reports that only about 0.5% of legal workers receive a tentative non-confirmation and, as a result, need to correct their records. The authorizing legislation for the optional E-Verify program was temporarily extended in March 2009 by the Omnibus Appropriations Act, 2009 ( P.L. 111-8 ) and is now scheduled to terminate on September 30, 2012. Whether to extend, revise and possibly require all employers to conduct electronic employment eligibility verification of all new hires or all of their employees will continue to be an issue in the 111 th Congress. Immigration-related document fraud includes the counterfeiting, sale, and use of identity documents (e.g., birth certificates or Social Security cards), as well as employment authorizations, passports, or visas. The INA has civil enforcement provisions for individuals and entities proven to have engaged in immigration document fraud. In addition, the U.S. Criminal Code makes it a criminal offense for a person to knowingly produce, use, or facilitate the production or use of fraudulent immigration documents. More generally, the U.S. Criminal Code criminalizes the knowing commission of fraud in connection with a wide range of identification documents. When ICE began charging aliens arrested in worksite raids with criminal offenses, including identity theft and false use of a Social Security number, advocates for the unauthorized aliens argued that such charges were excessive. These advocates maintained that showing bogus documents in order to work does not constitute identity theft and that civil penalties for document fraud should have been sufficient. Those supporting the stepped up enforcement emphasize that ICE should prosecute offenders with the full force of the laws. The integrity of the documents issued for immigration purposes, the capacity to curb immigration fraud, and the distinctions between identity theft and immigration fraud are among the central elements of the document fraud issue. A criminal alien, simply put, is a foreign national convicted of a criminal offense. Criminal offenses in the context of immigration law cover violations of federal, state, or, in some cases, foreign criminal law. Most crimes affecting immigration status fall under a broad category of crimes defined in the INA, notably those involving moral turpitude or aggravated felonies. It does not cover violations of the INA that are not defined as crimes, such being an unauthorized alien in the United States. There has been bipartisan agreement for over a decade to dedicate a portion of immigration enforcement resources to the removal of criminal aliens. In one of her first press conferences after becoming Homeland Security Secretary, Janet Napolitano stated that the removal of criminal aliens would be one of her top priorities. An emerging issue is whether current law on who is a criminal alien under the INA encompasses individuals whom many people would not consider dangerous. Critics of a hard-line approach cite examples of people who they argue should not be deported as criminal aliens: someone who shoplifted years ago; an elderly LPR of color who was arrested in the1960s by a police department known at that time for racism; or, a longtime LPR who pled guilty to attempted possession of a controlled substance 20 years ago--all of whom could have U.S. citizen spouses and U.S. citizen children. Legislation aimed at comprehensive immigration reform may take a fresh look at the grounds for excluding foreign nationals that were enacted in the 1990s. All foreign nationals seeking visas must undergo admissibility reviews performed by U.S. Department of State (DOS) consular officers abroad. These reviews are intended to ensure that they are not ineligible for visas or admission under the grounds for inadmissibility spelled out in the INA. These criteria are: health-related grounds; criminal history; security and terrorist concerns; public charge (e.g., indigence); seeking to work without proper labor certification; illegal entrants and immigration law violations; ineligible for citizenship; and, aliens previously removed. Over the past year, Congress incrementally revised the grounds for inadmissibility. Two laws enacted in the 110 th Congress altered longstanding policies on exclusion of aliens due to membership in organizations deemed terrorist. The 110 th Congress also revisited the health-related grounds of inadmissibility for those who were diagnosed with HIV/AIDS. More recently, the "H1N1 swine flu" outbreak focused the spotlight on inadmissibly screenings at the border. Questions about the public charge ground of inadmissibility arose in the context of Medicaid and the state Children's Health Insurance Program (CHIP) in the 111 th Congress. While advocacy of sweeping changes to the grounds for inadmissibility has not emerged, proponents of comprehensive immigration reform might seek to ease a few of these provisions as part of the legislative proposals. The provision that makes an alien who is unlawfully present in the United States for longer than 180 days inadmissible, for example, might be waived as part of a legislative package that includes legalization provisions. Tightening up the grounds for inadmissibility, conversely, might be part of the legislative agenda among those who support more restrictive immigration reform policies. While refugee, asylee and humanitarian concerns have traditionally been treated as distinct from immigration reform, comprehensive reform legislation may include provisions that impact these issue areas. As precedent, asylum reforms were included in the 1990 and the 1996 overhauls of the INA. Additionally, the foreign nationals who have been denied asylum or who have had temporary protected status (TPS) in the United States for many years may often be covered by legalization or status adjustment provisions. Those who would revise refugee and asylum provisions in the INA have divergent perspectives. Some express concern that potential terrorists could use refugee status or asylum as an avenue for entry into the United States, especially aliens from trouble spots in the Mideast, northern Africa and south Asia. Some assert that the non-governmental organizations and contractors for the United Nations that assist displaced people are expanding the definition of "refugee" to cover people never before considered refugees. Others argue that--given the religious, ethnic, and political violence in various countries around the world--it is becoming more difficult to differentiate the persecuted from the persecutors . Others maintain that current law does not offer adequate protections for people fleeing human rights violations and gender-based abuses that occur around the world, or that it is time to re-think U.S. refugee policy. As a signatory to the United Nations Protocol Relating to the Status of Refugees, the United States agrees that it will not return an alien to a country where his life or freedom would be threatened. A refugee is a person fleeing his or her 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. Asylum-seekers are individuals who apply for refugee protections after they have arrived in the United States. Those granted asylum as well as those who are determined to be refugees are eligible to become LPRs after one year in the United States. Not all humanitarian migrants, however, are eligible for asylum or refugee status. When civil unrest, violence, or natural disasters erupt in spots around the world, the United States may offer TPS or relief from removal, for example. How to establish an appropriate balance among the goals of protecting vulnerable and displaced people, maintaining homeland security, and minimizing the abuse of humanitarian policies is the crux of this issue. Specific topics include refugee resettlement, asylum policy, temporary protected status, unaccompanied alien children, and victims of trafficking and torture. War, violence, civil unrest, economic destablization, or food crisis, for example, would trigger the urgency of these issues in the 111 th Congress. The devastation caused by the January 12, 2010, earthquake in Haiti has led DHS Secretary Janet Napolitano to grant TPS to Haitians in the United States at the time of the earthquake and has raised a series of policy concerns on Haitian migration. The degree to which foreign nationals should be accorded certain rights and privileges as a result of their presence in the United States, along with the duties owed by such aliens given their legal status, sparks debate. Any immigration legislation, whether it expands, alters, or retracts migration levels, will likely prompt a debate over potential trade-offs and impacts on alien rights and responsibilities. All persons in the United States, whether U.S. nationals or foreign nationals, are accorded certain rights under the U.S. Constitution. However, foreign nationals do not enjoy the same degree of constitutional protections as U.S. citizens. Aliens who legally reside in the United States, moreover, possess greater constitutional protections than those aliens who do not. Federal laws, for example, place comprehensive restrictions on noncitizens' access to means-tested public assistance, with exceptions for LPRs with a substantial U.S. work history. Aliens in the United States without authorization (i.e., illegally present) are ineligible for federal public benefits, except for specified emergency services. Nonetheless, controversies and confusion abound, particularly regarding the eligibility of families comprised of people with a mix of immigration and citizenship status, such as an LPR married to an unauthorized alien with U.S. citizen children. A corollary issue is foreign nationals who have temporary employment authorizations and social security numbers, but who are not LPRs. Although it does not address the legality of the alien's immigration status, the Internal Revenue Code makes clear that "resident aliens" are generally taxed in the same manner as U.S. citizens. Those who are temporary legal residents or "quasi-legal" migrants pose a particular dilemma to some because they are permitted to work and have likely paid into the system that finances a particular benefit, such as social security or a tax refund, for which they may not be eligible. Unintended consequences, most notably when tightening up the identification requirements to stymie false claims of citizenship results in denying benefits to U.S. citizens, add complexity to the debate. These issues are arising in the context of specific legislation on due process rights, access to health care, tax liabilities and refunds, educational opportunities, and means-tested federal assistance. In the 110 th Congress, Senate action on comprehensive immigration reform legislation stalled at the end of June 2007 after several weeks of intensive floor debate. At the same time, the House Judiciary Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law held multiple hearings weekly in April, May and June of 2007 on various aspects of immigration reform. The House, however, did not act on comprehensive legislation in the 110 th Congress. During the 109 th Congress, both chambers passed major overhauls of immigration law, but did not reach agreement on a comprehensive reform package. During his time in the Senate, President Barack Obama supported comprehensive immigration reform legislation that included increased enforcement as well as a pathway to legal residence for certain unauthorized residents. Similar views have been expressed by the Secretary of Homeland Security Janet Napolitano. The Obama Administration has outlined its principles for comprehensive immigration reform as follows: Create Secure Borders: Protect the integrity of our borders. Support additional personnel, infrastructure and technology on the border and at our ports of entry. Improve Our Immigration System: Fix the dysfunctional immigration bureaucracy and increase the number of legal immigrants to keep families together and meet the demand for jobs that employers cannot fill. Remove Incentives to Enter Illegally: Remove incentives to enter the country illegally by cracking down on employers who hire undocumented immigrants. Bring People Out of the Shadows: Support a system that allows undocumented immigrants who are in good standing to pay a fine, learn English, and go to the back of the line for the opportunity to become citizens. Work with Mexico: Promote economic development in Mexico to decrease illegal immigration. The Obama Administration has stated that comprehensive immigration reform will be a top priority, along with other competing priorities in the areas of domestic and foreign policy. In February 2009, President Obama said, "we're going to be convening leadership on this issue so that we can start getting that legislation drawn up over the next several months." President Obama and officials in his Administration met with Members of Congress from both parties at a June 25, 2009, meeting on comprehensive immigration reform at the White House. In his 2010 State of the Union address, the President pledged to "continue the work of fixing our broken immigration system." It is precedented and usual, however, for Congress to take the lead on immigration legislation. Senate Judiciary Subcommittee on Immigration, Refugees and Border Security Chairman Charles Schumer has stated that comprehensive immigration reform legislation could be taken up as soon as later in 2009, but only if the first priority is a crackdown on illegal immigration. Senator Schumer has stated his principles for reform, summarized as follows: dramatically curtail future illegal immigration; significant additional increases in infrastructure, technology, and border personnel; illegal aliens must register their presence and submit to a rigorous process of converting to legal status and earning a path to citizenship, or face imminent deportation; biometric-based employer verification system; more room for both family immigration and employment-based immigration; encourage the world's best and brightest individuals to immigrate, but discourage businesses from using our immigration laws as a means to obtain temporary and less-expensive foreign labor; and convert the current flow of unskilled illegal immigrants into the United States into a more manageable and controlled flow of legal immigrants. The ranking Republican on the Senate Judiciary Subcommittee on Immigration, Refugees and Border Security, Senator John Cornyn, has stated his willingness to continue working on immigration reform: "Comprehensive, common-sense immigration reform remains a top priority for me. Any legislation must protect our borders, promote economic prosperity in Texas and throughout the United States, and be consistent with our American values of compassion, family, and opportunity." Senator Cornyn's articulated his principles for immigration reform, summarized as follows: strengthen border security first; strengthen interior security; create tamper-proof identification and deliver a reliable employer verification system; streamline the temporary worker programs and offer visas to more highly-skilled workers; and deliver a fair but firm solution to the millions of men, women, and children who are here in violation of our laws. Despite the similar sounds across these three sets of principles, achieving these consensus likely will be daunting. The ranking Republican on the House Judiciary Committee, Representative Lamar Smith, offers a counter perspective: "To achieve immigration reform, the choices are not just amnesty or mass deportation. A strategy of 'attrition through enforcement' would dramatically reduce the number of illegal immigrants over time." The difficulties in accomplishing immigration reform were underscored by Vice President Joseph Biden when he was asked about the chances of extending temporary migrant protection programs: "We believe, the President and I, that this problem can only be solved in the context of an overall immigration reform." Biden further stated, "We need some forbearance as we try to put together a comprehensive approach to deal with this." As the 111 th Congress nears its end, some observers are speculating that specific immigration reform measures that have a tradition of bipartisan support, such as legislation that would enable some unauthorized alien students to become LPRs (DREAM Act), revise the H-1B visas process, or amend provisions pertaining to victims of trafficking, might be handled independent of comprehensive immigration reform.

There is a broad-based consensus that the U.S. immigration system is broken. This consensus erodes, however, as soon as the options to reform the U.S. immigration system are debated. The number of foreign-born people residing in the United States is at the highest level in U.S. history and has reached a proportion of the U.S. population--12.6%--not seen since the early 20th century. Of the 38 million foreign-born residents in the United States, approximately 16.4 million are naturalized citizens. According to the latest estimates by the Department of Homeland Security (DHS), about 10.8 million unauthorized aliens were living in the United States in January 2009. The Pew Hispanic Center recently reported an estimate of 11.1 million unauthorized aliens in March 2009, down from a peak of 12 million in March 2007. Some observers and policy experts maintain that the presence of an estimated 11 million unauthorized residents is evidence of flaws in the legal immigration system as well as failures of immigration control policies and practices. The 111th Congress is faced with strategic questions of whether to continue to build on incremental reforms of specific elements of immigration (e.g., employment verification, skilled migration, temporary workers, worksite enforcement, and legalization of certain categories of unauthorized residents) or whether to comprehensively reform the Immigration and Nationality Act (INA). President Barack Obama has affirmed his support for comprehensive immigration reform legislation that includes increased enforcement as well as a pathway to legal residence for certain unauthorized residents. This report synthesizes the multi-tiered debate over immigration reform into key elements: legal immigration; legalization; immigration control; refugees, asylees, and humanitarian migrants; and alien rights, benefits, and responsibilities. It delineates the issues for the 111th Congress on permanent residence, temporary admissions, border security, worksite enforcement, employment eligibility verification, document fraud, criminal aliens, and the grounds for inadmissibility. Addressing these contentious policy reforms against the backdrop of economic crisis sharpens the social and business cleavages and narrows the range of options. The report will be updated as events warrant.

The Environmental Protection Agency's (EPA's) Spill Prevention, Control, and Countermeasure (SPCC) regulations include requirements for certain facilities to prevent, prepare for, and respond to discharges of oil and oil products--defined broadly--that may reach U.S. navigable waters or adjoining shorelines. Requirements include secondary containment (e.g., dikes or berms) for certain storage units and the need for a licensed professional engineer to certify a facility's SPCC plan. In recent years, the SPCC program has received considerable interest from Congress. Most of this interest has involved the SPCC program's applicability to farms. Because farms may store oil onsite for agricultural equipment use, they may be subject to the SPCC regulations if the oil storage capacity exceeds regulatory thresholds. Legislation from the 113 th and 114 th Congresses altered the applicability of the SPCC regulations for farms. Stakeholder arguments in support of such legislation often involve the financial impact of the SPCC regulations, particularly for farms. For example, a 2012 House report stated that the "mandated infrastructure improvements--along with the necessary inspection and certification by a specially licensed Professional Engineer will cost many farmers tens of thousands of dollars." However, some Members have argued that EPA has considered the costs and benefits of its SPCC regulations during multiple rulemaking processes and determined that the benefits outweigh the costs. EPA contends that the SPCC compliance costs that help prevent oil spills are much less than the costs of oil spill cleanup and potential civil penalties. In addition, a 2015 EPA study stated: EPA concluded that there was insufficient evidence to provide an exemption specific to farms or make changes to regulatory thresholds since the types of tanks and oil storage conditions at farms were generally similar to those of other facilities, with similar potential for discharge. The first section of this report provides background information on EPA's SPCC program, including the program's statutory authority and regulatory developments and requirements. The second section identifies legislation in the 114 th Congress that addresses provisions in the SPCC regulations. The Federal Water Pollution Control Act Amendments of 1970 included a provision directing the President to promulgate oil spill prevention and response regulations. Two years later, Congress amended that provision with the enactment of the Federal Water Pollution Control Act Amendments of 1972--commonly referred to as the Clean Water Act (CWA). The relevant provision from the 1972 CWA remains the same today and reads as follows: Consistent with the National Contingency Plan ... the President shall issue regulations consistent with maritime safety and with marine and navigation laws ... establishing procedures, methods, and equipment and other requirements for equipment to prevent discharges of oil and hazardous substances from vessels and from onshore facilities and offshore facilities, and to contain such discharges. In 1970, President Nixon established the Environmental Protection Agency (EPA) and reorganized the executive branch delegations of various presidential authorities. Subsequent executive orders and interagency agreements altered the implementation authority framework. In the context of oil discharge regulations, the Coast Guard has jurisdiction over vessels, and several agencies have jurisdiction over facilities. As of a 1994 interagency agreement, EPA has jurisdiction over non-transportation-related onshore and offshore facilities, which includes facilities located "landward of the coast line." Pursuant to the 1994 agreement, the Department of Transportation has jurisdiction over transportation-related onshore facilities, deepwater ports, and transportation-related facilities located landward of coast line. The Department of the Interior has jurisdiction over offshore facilities, including associated pipelines, located seaward of the coast line. In addition, Section 311(o) of the CWA states, "Nothing in this section shall be construed as preempting any State or political subdivision thereof from imposing any requirement or liability with respect to the discharge of oil or hazardous substance into any waters within such State, or with respect to removal activities related to such discharge." Many states have their own oil spill programs. A discussion of these state programs is beyond the scope of this report. EPA's SPCC regulations are in 40 C.F.R. Part 112. The regulations require certain facilities (discussed below) to prepare and implement, but not submit, SPCC plans. (A subset of higher-risk facilities must submit Facility Response Plans to EPA.) Among other obligations, SPCC regulations require secondary containment (e.g., dikes or berms) for certain oil-storage units. In addition, SPCC plans must be certified by a licensed professional engineer unless a facility owner/operator meets the conditions that allow for self-certification. In general, facilities with no reportable discharge history that store 10,000 gallons or less, in aggregate, can self-certify their SPCC plans. For farms, this particular threshold is 20,000 gallons. EPA estimated that approximately 99% of all farms have an oil storage capacity less than or equal to 20,000 gallons and would thus be able to self-certify their plans if they were subject to SPCC requirements. EPA issued its first SPCC regulations in 1973, which became effective January 10, 1974. EPA made changes and clarifications to the SPCC regulations in 2002. Over the next eight years, EPA extended the 2002 rule's compliance date on multiple occasions and made further amendments to the 2002 rule. For most types of facilities subject to SPCC requirements, the deadline for complying with the changes made in 2002 was November 10, 2011. However, a subsequent EPA rulemaking extended this compliance date for farms to May 10, 2013. On March 26, 2013, Congress enacted P.L. 113-6 , which prohibited EPA from using appropriations to enforce SPCC provisions at farms for 180 days after enactment (i.e., through September 22, 2013). Notwithstanding these recent deadlines, the 2002 final rule and subsequent revisions did not alter the requirement for owners or operators of facilities, including farms, to maintain and continue implementing their SPCC plans in accordance with the SPCC regulations that have been in effect since 1974. The EPA SPCC plan requirements apply to non-transportation-related facilities that produce, store, use, or consume oil or oil products and could reasonably be expected to discharge oil into or upon navigable waters of the United States or adjoining shorelines. The definition of "navigable waters" has been a long-standing controversial topic and subject of litigation in recent years. On May 27, 2015, the Army Corps of Engineers and EPA finalized revised regulations that define the scope of waters protected under the CWA. The definition of oil has also garnered attention from policymakers and stakeholders in recent years. The CWA Section 311 definition states: "oil" means oil of any kind or in any form, including, but not limited to, petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes other than dredged spoil. Since the inception of the SPCC regulations, EPA has interpreted this definition to apply to both petroleum-based and non-petroleum-based oil. In a 1975 Federal Register notice, EPA clarified that its 1973 SPCC regulations apply to oils from animal and vegetable sources. EPA's SPCC regulatory definition (40 C.F.R. SS112.2) states: Oil means oil of any kind or in any form, including, but not limited to: fats, oils, or greases of animal, fish, or marine mammal origin; vegetable oils, including oils from seeds, nuts, fruits, or kernels; and, other oils and greases, including petroleum, fuel oil, sludge, synthetic oils, mineral oils, oil refuse, or oil mixed with wastes other than dredged spoil. Except for farms, which are discussed below, facilities are subject to the rule if they meet at least one of the following capacity thresholds: an aboveground aggregate oil storage capacity greater than 1,320 gallons, or a completely buried oil storage capacity greater than 42,000 gallons. In 2009, EPA estimated that approximately 640,000 facilities are subject to the SPCC requirements. Figure 2 illustrates the breakdown of these facilities by industry categories. Facilities involved in oil and gas production represent the largest percentage (29%) of facilities subject to the SPCC regulations, with farms coming in a close second (27%). EPA estimated that the SPCC requirements apply to approximately 152,000 farms, which represents approximately 8% of all farms nationwide. Many of the recent SPCC issues have involved program scope and applicability, particularly in the context of farms. The SPCC regulations (40 C.F.R. SS112.2) define the term farm as a facility on a tract of land devoted to the production of crops or raising of animals, including fish, which produced and sold, or normally would have produced and sold, $1,000 or more of agricultural products during a year. The applicability of SPCC regulations to farms garnered considerable attention in recent Congresses. Members introduced a number of bills to modify the applicability of the SPCC regulations to farms, ultimately resulting in enacted legislation. On June 10, 2014, the President signed the Water Resources Reform and Development Act (WRRDA) of 2014 ( P.L. 113-121 ). Section 1048 of the act altered the applicability of the SPCC to farms. Selected changes include the following: Farms with an aggregate aboveground storage capacity of less than 2,500 gallons are not subject to SPCC regulations (compared to 1,320 gallons for other facilities); Farms with an aggregate aboveground storage capacity of less than 6,000 gallons (or a to-be-determined lower threshold, discussed below) and no reportable discharge history are not subject to SPCC regulations; Farms with an aggregate aboveground storage capacity of less than 20,000 gallons (the prior threshold was 10,000 gallons), no individual storage tank greater than 10,000 gallons, and no reportable discharge history may self-certify their SPCC plan in lieu of hiring a professional engineer for certification; and Farms can exclude oil containers on separate parcels with capacities less than 1,000 gallons when determining aggregate storage capacity. WRRDA directed EPA to determine whether the interim 6,000 gallon threshold (mentioned above) should be decreased (to not less than 2,500 gallons) based on a significant risk of an oil discharge to water. If the agency determines that the 6,000 gallon threshold is not appropriate, the act directs EPA to adjust the exemption level through the regulatory process according to the findings in the study. EPA released the SPCC threshold study in June 2015. "Based on evidence that small discharges cause significant harm and lack of evidence that farms are inherently safer than other types of facilities," EPA concluded that the appropriate threshold should be 2,500 gallons instead of 6,000 gallons. According to the regulatory agenda, EPA was scheduled to release a proposed rule regarding this change in August 2016, with a final rule scheduled for December 2016. As of the date of this report, EPA has not published a proposed rule. On December 16, 2016, the President signed the Water Infrastructure Improvements for the Nation Act (WIIN, P.L. 114-322 ). Many WIIN provisions are drawn in whole or in part from other legislation in the 114 th Congress, including the House or Senate versions of the Water Resources Development Act of 2016-- H.R. 5303 and S. 2848 . Section 5011 of WIIN modifies the applicability of the SPCC regulations for farms. WIIN provisions build upon the changes made in WRRDA 2014. In particular, the SPCC regulations would not apply to farm containers on separate parcels with (1) an individual storage capacity of 1,000 gallons or less, and (2) an aggregate storage capacity of 2,500 gallons or less. Under WRRDA, smaller containers (i.e., 1,000 gallons or less) would not be counted toward an aggregate storage capacity, but these containers were still subject to any relevant SPCC regulations. Pursuant to the above WIIN provision, smaller containers would not be counted toward a farm's aggregate storage capacity or covered by SPCC regulations even if the farm's aggregate storage capacity breached regulatory thresholds. The phrase "separate parcels" is a key term in the existing statutory language, but it is uncertain how EPA would interpret this phrase. Although the term parcel is included in the definition of facility , the term parcel is not defined in SPCC regulations. EPA modified the definition of facility in 2008, which reads: Facility means any mobile or fixed, onshore or offshore building, property, parcel, lease, structure, installation, equipment, pipe, or pipeline (other than a vessel or a public vessel) used in oil well drilling operations, oil production, oil refining, oil storage, oil gathering, oil processing, oil transfer, oil distribution, and oil waste treatment, or in which oil is used, as described in appendix A to this part. The boundaries of a facility depend on several site-specific factors, including but not limited to, the ownership or operation of buildings, structures, and equipment on the same site and types of activity at the site. Contiguous or non-contiguous buildings, properties, parcels, leases, structures, installations, pipes, or pipelines under the ownership or operation of the same person may be considered separate facilities. Table 1 below compares the SPCC aggregate capacity thresholds before WRRDA, after WRRDA, and after enactment of WIIN in 2016. Unlike EPA regulations promulgated under some other statutes, SPCC regulations have not been delegated to states for implementation or enforcement. Section 311 of the CWA does not provide authority to delegate SPCC authority to the states. Therefore, enforcement of the program is performed by the EPA regional offices. As noted earlier, many states have their own regulatory programs that address oil storage units, but these programs do not replace EPA's authority or responsibility. Enforcement of the SPCC program may be an issue for policymakers. According to a 2012 EPA inspector general report, "the Agency remains largely unaware of the identity and compliance status of the vast majority of CWA Section 311 regulated facilities." The report stated that EPA regional offices inspected approximately 3,700 facilities (between August 2010 to June 2011) for compliance with SPCC requirements and that approximately 55% of the facilities were deemed to be out of compliance for various reasons. CRS is not aware of a more recent report documenting enforcement activities.

In 1970, Congress enacted legislation directing the President to promulgate oil spill prevention and response regulations. President Nixon delegated this presidential authority to the Environmental Protection Agency (EPA) in 1970. In 1973, EPA issued Spill Prevention, Control, and Countermeasure (SPCC) regulations that require certain facilities to prevent, prepare for, and respond to oil discharges that may reach navigable waters of the United States or adjoining shorelines. In general, a facility must prepare an SPCC plan if the facility has an aboveground aggregate oil storage capacity greater than 1,320 gallons or a completely buried oil storage capacity greater than 42,000 gallons. Among other obligations, SPCC regulations require secondary containment (e.g., dikes or berms) for certain oil-storage units. A licensed professional engineer must certify the plan, although some facilities--depending on storage capacity and spill history--may be able to self-certify. In recent years, the SPCC regulations have received considerable interest from Congress. Most of this interest has involved the applicability of SPCC regulations to farms, which may be subject to the SPCC regulations for oil stored onsite for agricultural equipment use. Farms account for approximately 25% of SPCC regulated entities, second only to oil and gas production facilities. In 2002, EPA issued a final rule that made changes and clarifications to its SPCC regulations. For most types of facilities subject to SPCC requirements, the compliance deadline was November 10, 2011. However, EPA extended this compliance date for farms to May 10, 2013. The 2013 compliance date generated considerable attention in the 113th Congress. On June 10, 2014, the President signed the Water Resources Reform and Development Act (WRRDA) of 2014 (P.L. 113-121). The act altered the applicability of the SPCC regulations to farms. Two key changes include 1. farms with an aggregate aboveground oil storage capacity less than 2,500 gallons are not subject to SPCC regulations; and 2. farms with an aggregate aboveground oil storage capacity less than 6,000 gallons (or an alternate threshold determined by EPA) and no reportable discharge history are not subject to SPCC regulations. WRRDA directed EPA to conduct a study to determine whether the interim 6,000 gallon threshold should be decreased (to not less than 2,500 gallons) based on a significant risk of an oil discharge to water. In June 2015, EPA concluded that the appropriate threshold should be 2,500 gallons instead of 6,000 gallons. According to the regulatory agenda, EPA was scheduled to release a proposed rule regarding this change in August 2016, with a final rule scheduled for December 2016. As of the date of this report, EPA has not published a proposed rule. On December 16, 2016, the President signed the Water Infrastructure Improvements for the Nation Act (WIIN, P.L. 114-322). WIIN provisions build upon the changes made in WRRDA. In particular, the SPCC regulations would not apply to farm containers on separate parcels with (1) an individual storage capacity of 1,000 gallons or less, and (2) an aggregate storage capacity of 2,500 gallons or less. Under WRRDA, smaller containers (i.e., 1,000 gallons or less) would not be counted toward an aggregate storage capacity, but these containers were still subject to any relevant SPCC regulations. Pursuant to the WIIN provision, smaller containers would not be counted toward a farm's aggregate storage capacity or covered by SPCC regulations even if the farm's aggregate storage capacity breached regulatory thresholds.

The diversity rationale for affirmative action in public education has long been a topic of political and legal controversy. Many colleges and universities have established affirmative action policies not only to remedy past discrimination, but also to achieve a racially and ethnically diverse student body or faculty. Although the Supreme Court has recognized that the use of race-based policies to promote diversity in higher education may be constitutional in two cases involving the University of Michigan's admissions policies--namely Grutter v. Bollinger and Gratz v. Bollinger --the Court had never, until recently, considered whether diversity is a constitutionally permissible goal in the elementary and secondary education setting. To resolve this question, the Supreme Court agreed to review two cases that involved the use of race to maintain racially diverse public schools. The cases were Meredith v. Jefferson County Board of Education --formerly MacFarland v. Jefferson County Public Schools --and Parents Involved in Community Schools v. Seattle School District No. 1 . In Parents Involved in Community Schools v. Seattle School District No. 1 , a consolidated ruling that resolved both cases, the Court ultimately struck down the school plans at issue, holding that they violated the equal protection guarantee of the Fourteenth Amendment. This report provides an overview of the Court's decision, as well as a discussion of its implications for future educational efforts to promote racial diversity. The two cases that the Court reviewed involved challenges to school assignment and transfer plans in Louisville and Seattle. In MacFarland v. Jefferson County Public Schools, issued on the first anniversary of the University of Michigan decisions and the 50 th anniversary of Brown v. Board of Education , a federal district court in Kentucky upheld a Louisville district's voluntary consideration of race in making student assignments to achieve racial integration in the public schools. Jefferson County Public Schools (JCPS) were ordered by judicial decree to desegregate in 1975. Under the desegregation plan, each school was to have between 15% and 50% African-American enrollment and students were bused, if necessary, to ensure racial diversity. Twenty-five years later, in 2000, the federal courts ended their supervision of the desegregation plan, but the JCPS voluntarily opted to maintain its integrated schools through a "managed choice" plan that involved consideration of geographic boundaries, special programs, and school choice, as well as race. The plan was challenged in a lawsuit in 2000 by black parents whose children were denied admission to Central High School, which was already at the upper percentage limit for minority enrollment. The district court upheld the school plan, finding that the managed choice plan served numerous compelling state interests, many of which were similar to interests upheld by the Supreme Court in Grutter , and that the student assignment plan was narrowly tailored in all respects but one, which the district was required to revise. For reasons "articulated in the well-reasoned opinion of the district court," the Sixth Circuit summarily affirmed the district court's decree without issuing a detailed written opinion. Meanwhile, in Parents Involved in Community Schools v. Seattle School District No. 1 , the Ninth Circuit applied Grutter and Gratz to approve a school district's plan to maintain racially diverse schools. Under Seattle's "controlled choice" high school student assignment plan, students were given the option to attend high schools across the district, but if the demand for seats exceeded the supply at a particular school, a student's race was considered as a tie-breaker in determining admittance to the oversubscribed school. The racial tie-breaker applied only to schools whose student bodies deviated by more than 15 percentage points from the overall racial makeup of the district, then "approximately 40% white and 60% nonwhite." The Seattle plan was voluntarily adopted to "achiev[e] diversity [and] limit racial isolation" in the schools, not as a part of a desegregation remedy. In an en banc decision, the Ninth Circuit ruled that the school district had a compelling interest in the educational and social benefits of racial diversity and in avoiding racially concentrated or isolated schools. Further, the court held that the district's plan was sufficiently narrowly tailored to pass constitutional muster. The ruling reversed an earlier three-judge appellate panel's contrary decision that the school district's plan to maintain racially diverse schools was not sufficiently narrowly tailored. As noted above, the Supreme Court granted review in MacFarland v. Jefferson County Public Schools --now Meredith v. Jefferson County Board of Education --and Parents Involved in Community Schools v. Seattle School District No. 1 to consider the question of what steps a public school district may take to maintain racial diversity in elementary and secondary schools. In a consolidated ruling that resolved both cases, the Court ultimately struck down the school plans, holding that they violated the equal protection guarantee of the Fourteenth Amendment. Prior to its ruling in Parents Involved in Community Schools , the Supreme Court had considered the constitutionality of school plans to promote racial diversity on three separate occasions. In all three of these cases, however, the Court considered the issue in the context of higher education. Nevertheless, the Court's reasoning in its three higher education cases guided its review in Parents Involved in Community Schools . Therefore, the three cases-- Regents of the University of California v. Bakke , Grutter v. Bollinger , and Gratz v. Bollinger --are described below. The Bakke ruling in 1978 launched the contemporary constitutional debate over state-sponsored affirmative action. The notion that diversity could rise to the level of a compelling constitutional interest in the educational setting sprang more than a quarter century ago from Justice Powell's opinion in the case. While concluding that a state medical school could not set-aside a certain number of seats for minority applicants, Justice Powell opined that a diverse student body may serve educators' legitimate interest in promoting the "robust" exchange of ideas. He cautioned, however, that "[t]he diversity that furthers a compelling state interest encompasses a far broader array of qualifications and characteristics of which ethnic origin is but a single though important element." A "notable lack of unanimity" was evident from the six separate opinions filed in Bakke . Justice Powell split the difference between two four-Justice pluralities in the case. One camp, led by Justice Stevens, struck down the admissions quota on statutory civil rights grounds. Another led by Justice Brennan would have upheld the medical school's policy as a remedy for societal discrimination. Justice Powell held the "dual admissions" procedure to be unconstitutional, and ordered Bakke's admission. But, he concluded, that the state's interest in educational diversity could warrant consideration of students' race in certain circumstances. For Justice Powell, a diverse student body fostered the "robust" exchange of ideas and academic freedom deserving of constitutional protection. Justice Powell's theory of diversity as a compelling governmental interest did not turn on race alone. He pointed with approval to the "Harvard Plan," which defined diversity in terms of a broad array of factors and characteristics. Thus, an applicant's race could be deemed a "plus" factor. It was considered on a par with personal talents, leadership qualities, family background, or any other factor contributing to a diverse student body. However, the race of a candidate could not be the "sole" or "determinative" factor. No other Justice joined in the Powell opinion. Although Justice Powell's opinion announced the judgment of the Court, no other Bakke Justices joined him on that point. Justice Powell ruled the "dual admission program" at issue to be unconstitutional and the white male plaintiff entitled to admission, while four other Justices reached the same result on statutory rather than constitutional grounds. Another four Justice plurality concluded that the challenged policy was lawful, but agreed with Justice Powell that the state court had erred by holding that an applicant's race could never be taken into account. Only Justice Powell, therefore, expressed the view that the attainment of a diverse student body could be a compelling state interest. For nearly two decades, colleges and universities relied on the Powell opinion in Bakke to support race-conscious student diversity policies, although there was some disagreement among federal appeals courts regarding the meaning and application of the ruling. The judicial divide over Bakke 's legacy was vividly underscored by a pair of separate trial court decisions, one upholding for diversity reasons the race-based undergraduate admissions policy of the University of Michigan, the other voiding a special minority law school admissions program at the same institution. Restoring a degree of clarity to the law, the Supreme Court concluded its 2002-03 term with rulings in the Michigan cases. In Grutter v. Bollinger , a 5 to 4 majority of the Justices held that the University of Michigan Law School had a "compelling" interest in the "educational benefits that flow from a diverse student body," which justified its consideration of race in admissions to assemble a "critical mass" of "underrepresented" minority students. But in a companion decision, Gratz v. Bollinger , six Justices decided that the University of Michigan's policy of awarding "racial bonus points" to minority applicants was not "narrowly tailored" enough to pass constitutional scrutiny. Generally setting the bar for admission to the Michigan Law School was a "selection index" based on applicants' composite LSAT score and undergraduate GPA. A 1992 policy statement, however, made an explicit commitment to "racial and ethnic diversity," seeking to enroll a "critical mass" of black, Mexican-American, and Native American students. The objective was to enroll minority students in sufficient numbers to enable their participation in classroom discussions without feeling "isolated or like spokesmen for their race." To foster, "distinctive perspectives and experiences," admission officers consider a range of "soft variables"--e.g., talents, interests, experiences, and "underrepresented minority" status--in their admissions decisions. In the course of each year's admissions process, the record showed, minority admission rates were regularly reported to track "the racial composition of the developing class." The 1992 policy replaced an earlier "special admissions program," which set a written goal of 10-12% minority enrollment and lower academic requirements for those groups. A notable aspect of the Grutter majority opinion was the degree to which it echoed the Powell rationale from Bakke. Indeed, the majority quoted extensively from Justice Powell's opinion, finding it to be the "touchstone for constitutional analysis of race-conscious admissions policies." Overarching much of the Court's reasoning were two paramount themes, both of which drew considerable criticism from the dissent. First, in applying "strict scrutiny" to the racial aspects of the Law School admissions program, the Court stressed the situational nature of constitutional interpretation, taking "relevant differences into account." Thus, the majority opined, "[c]ontext matters when reviewing race-based governmental action" for equal protection purposes and "[n]ot every decision influenced by race is equally objectionable," but may depend upon "the importance and the sincerity of the reasons advanced by the governmental decisionmaker" for that particular use of race. Second, and equally significant, was the deference accorded to the judgment of educational decisionmakers in defining the scope of their academic mission, even in regard to matters of racial and ethnic diversity. "[U]niversities occupy a special niche in our constitutional tradition," the Court stated, such that "[t]he Law School's educational judgment ... that diversity is essential to its educational mission is one to which we defer." Institutional "good faith" would be "presumed" in the absence of contrary evidence. One group of dissenters took particular exception to what it viewed as "the fundamentally flawed proposition that racial discrimination can be contextualized"--deemed "compelling" for one purpose but not another--or that strict scrutiny permits "any sort of deference" to "the Law School's conclusion that its racial experimentation leads to educational benefits." Indeed, the dissenters found such deference to be "antithetical" to the level of searching review demanded by strict scrutiny. Satisfied that the Law School had "compelling" reasons for pursuing a racially diverse student body, the Court moved to the second phase of strict scrutiny analysis. "Narrow tailoring," as noted, requires a close fit between "means" and "end" when the state draws any distinction based on race. In Grutter , the concept of "critical mass" won the majority's approval as "necessary to further its compelling interest in securing the educational benefits of a diverse student body." According to the Court: We find that the Law School's admissions program bears the hallmarks of a narrowly tailored plan. As Justice Powell made clear in Bakke , truly individualized consideration demands that race be used in a flexible, nonmechanical way. It follows from this mandate that universities cannot establish quotas for members of certain racial groups or put members of those groups on separate admissions tracks. Nor can universities insulate applicants who belong to certain racial or ethnic groups from the competition for admission. Universities can, however, consider race or ethnicity more flexibly as a "plus" factor in the context of individualized consideration of each and every applicant. The Court drew a key distinction between forbidden "quotas" and permitted "goals," exonerating the Law School's admission program from constitutional jeopardy. The majority observed that both approaches pay "some attention to numbers." But while the former are "fixed" and "reserved exclusively for certain minority groups," the opinion continues, the Law School's "goal of attaining a critical mass" of minority students required only a "good faith effort" by the institution. In addition, minority Law School enrollment between 1993 and 2000 varied from 13.5 to 20.1 percent, "a range inconsistent with a quota." In a separate dissent, the Chief Justice objected that the notion of a "critical mass" was a "sham," or subterfuge for "racial balancing," since it did not explain disparities in the proportion of the three minority groups admitted under its auspices. Other factors further persuaded the Court that the Law School admissions process was narrowly tailored. By avoiding racial or ethnic "bonuses," the policy permitted consideration of "all pertinent elements of diversity," racial and nonracial, in "a highly individualized, holistic review of each applicant's file." The Court also found that "race neutral alternatives" had been "sufficiently considered" by the Law School, although few specific examples are provided. Importantly, however, the opinion makes plain that "exhaustion" of "every conceivable alternative" is not constitutionally required, only a "serious good faith consideration of workable race-neutral alternatives that will achieve the diversity the university seeks." Consequently, the Law School was not required to consider a lottery or lowering of traditional academic benchmarks--GPA and LSAT scores--for all applicants since "these alternatives would require a dramatic sacrifice of diversity, the academic quality of all admitted students, or both." And, because the admissions program was based on individual assessment of all pertinent elements of diversity, it did not "unduly burden" non-minority applicants. Nonetheless, the Court emphasized the need for "reasonable durational provisions," and "periodic reviews" by institutions conducting such programs. To drive home the point, the majority concluded with a general admonition. "We expect that 25 years from now, the use of racial preferences will no longer be necessary to further the interest approved today." Undergraduate admission to the University of Michigan had been based on a point system or "student selection index." A total possible 150 points could be awarded for factors, academic and otherwise, that made up the selection index. Academic factors accounted for up to 110 points, including 12 for standardized test performance. By comparison, 20 points could be awarded for one, but only one, of the following: membership in an underrepresented minority group, socioeconomic disadvantage, or athletics. Applicants could receive one to four points for "legacy" or alumni relationships, three points for personal essay, and five points for community leadership and service, six points for in-state residency, etc. In practice, students at the extremes of academic performance were typically admitted or rejected on that basis alone. But for the middle range of qualified applicants, these other factors were often determinative. Finally, counselors could "flag" applications for review by the Admissions Review Committee, where any factor important to the freshman class composition--race included--was not adequately reflected in the selection index score. The four Grutter dissenters were joined by two Justices in striking down the racial bonus system for undergraduate admissions in Gratz . Basically, the same factors that saved the Law School policy, by their absence, conspired to condemn the undergraduate program in the eyes of the majority. Since the university's "compelling" interest in racial student diversity was settled in Grutter , the companion case focused on the reasons why the automatic award of 20 admission points to minority applicants failed the narrow tailoring aspect of strict scrutiny analysis. Relying, again, on the Powell rationale in Bakke , the policy was deemed more than a "plus" factor, as it denied each applicant "individualized consideration" by making race "decisive" for "virtually every minimally qualified underrepresented minority applicant." Nor did the procedure for "flagging" individual applications for additional review rescue the policy since "such consideration is the exception and not the rule," occurring--if at all--only after the "bulk of admission decisions" are made based on the point system. The Court rejected the university's argument based on "administrative convenience," that the volume of freshman applications makes it "impractical" to apply a more individualized review. "[T]he fact that the implementation of a program capable of providing individualized consideration might present administrative challenges does not render constitutional an otherwise problematic system." Finally, the majority made plain that its constitutional holding in Gratz is fully applicable to private colleges and universities pursuant to the federal civil rights laws. "We have explained that discrimination that violates the Equal Protection Clause of the Fourteenth Amendment committed by an institution that accepts federal funds also constitutes a violation of Title VI [of the 1964 Civil Rights Act]." As noted above, the Supreme Court had never, until recently, considered the constitutionality of the voluntary use of race as a factor in achieving diversity in elementary and secondary education. All three of the federal appeals courts to consider the issue since Grutter and Gratz were decided upheld racial diversity measures in public schools, but these opinions conflicted with pre- Grutter / Gratz appellate rulings that rejected such racially based plans. Possibly as a result of this conflict, the Supreme Court agreed to review whether the school diversity plans at issue in Meredith and Parents Involved in Community Schools violate the equal protection clause of the Constitution. The Fourteenth Amendment of the Constitution provides, in relevant part: No state shall make or enforce any law which shall abridge the privileges or immunities of the citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws . Under the Supreme Court's equal protection jurisprudence, "the general rule is that legislation is presumed to be valid and will be sustained if the classification drawn by the statute is rationally related to a legitimate state interest." Laws based on suspect classifications such as race or gender, however, typically receive heightened scrutiny and require a stronger state interest to justify the classification. The highest level of judicial review, known as strict scrutiny, is applied to laws that contain classifications based on race. Such classifications will survive strict scrutiny only if the government can show that they: (1) further a compelling governmental interest, and (2) are narrowly tailored to meet that interest. Ultimately, the Supreme Court held that the Louisville and Seattle school plans violated the equal protection clause. However, the decision was fractured, with five different Justices filing opinions in the case. Announcing the judgment of the Court was Chief Justice Roberts, who led a plurality of four Justices in concluding that the school plans were unconstitutional because they did not serve a compelling governmental interest. Although Justice Kennedy, who concurred in the Court's judgment striking down the plans, disagreed with the plurality's conclusion that the diversity plans did not serve a compelling governmental interest, he found that the school plans were unconstitutional because they were not narrowly tailored. In addition, Justice Thomas filed a concurring opinion, and Justices Stevens and Breyer filed separate dissenting opinions. In the portion of his opinion that was joined by Justice Kennedy and that therefore announced the judgment of the Court, Chief Justice Roberts began by noting that the Court had jurisdiction in the case, thereby rejecting a challenge to the standing of the plaintiff organization Parents Involved in Community Schools (PICS). Chief Justice Roberts then turned to the substantive merits of the claims involved, reiterating that governmental racial classifications must be reviewed under strict scrutiny. As a result, the Court examined whether the school districts had demonstrated that their assignment and transfer plans were narrowly tailored to achieve a compelling governmental interest. In assessing the compelling interest prong of the strict scrutiny test, Chief Justice Roberts noted that the Court has recognized two interests that qualify as compelling where the use of racial classifications in the school context is concerned: remedying the effects of past intentional discrimination and promoting diversity in higher education. However, the Chief Justice found that neither of these interests was advanced by the school plans at issue. According to the Chief Justice, because Seattle schools were never intentionally segregated and because the lifting of its desegregation order demonstrated that Louisville schools had successfully remediated past discrimination in its schools, neither school district could assert a compelling interest in remedying past intentional discrimination. Likewise, the Court argued that the Grutter precedent, which recognized diversity in higher education as a compelling governmental interest, did not govern the current cases. According to Chief Justice Roberts, the compelling interest recognized in Grutter was in a broadly defined diversity that encompassed more than just racial diversity and that focused on each applicant as an individual. Because race was the only factor considered by the school districts rather than other factors that reflected a broader spectrum of diverse qualifications and characteristics, and because the plans did not provide individualized review of applicants, the plurality opinion found that the school districts' articulated interest in diversity was not compelling. Added the Chief Justice, "[e]ven when it comes to race, the plans here employ only a limited notion of diversity, viewing race exclusively in white/nonwhite terms in Seattle and black/'other' terms in Jefferson County." In rejecting Grutter as applicable precedent, the Court also noted that the decision had rested in part on the unique considerations of higher education, and that those considerations were absent in the elementary and secondary education context. Even if the school districts had met the first prong of the strict scrutiny test by establishing a compelling governmental interest in the use of racial classifications to make school assignments, the Court found the school plans would still have failed the second prong of the test because they were not sufficiently narrowly tailored to meet their stated goals. According to Chief Justice Roberts, in both Seattle and Louisville, only a few students were assigned to a non-preferred school based on race. As a result, "the minimal impact of the districts' racial classifications on school enrollment casts doubt on the necessity of using racial classifications," especially in light of the fact that such racial classifications are permissible in only the most extreme circumstances. Additionally, the Court was concerned that the school districts had failed to consider methods other than racial classifications to achieve their goals, despite a requirement that narrowly tailored programs consider race-neutral alternatives. Although Justice Kennedy joined the above portions of the plurality opinion, thereby forming a majority in favor of striking down the school plans, he did not join the remainder of the plurality opinion, which concluded for additional reasons that the school plans were unconstitutional. In these portions of his opinion, Chief Justice Roberts faulted the school plans for tying their diversity goals to each district's specific racial demographics rather than to "any pedagogical concept of the level of diversity needed to obtain the asserted educational benefits." In other words, each district tried to establish schools with racial diversity that mirrored the percentages of racial groups in their respective overall populations. This effort, according to the Chief Justice, amounted to unconstitutional racial balancing because the plans were not in fact narrowly tailored to the goal of achieving the educational and social benefits that allegedly flow from racial diversity, but rather were tailored to racial demographics instead. Indeed, Chief Justice Roberts wrote, "[a]ccepting racial balancing as a compelling state interest would justify the imposition of racial proportionality throughout American society, contrary to our repeated recognition that at the heart of the Constitution's guarantee of equal protection lies the simple command that the Government must treat citizens as individuals, not as simply components of a racial, religious, sexual or national class." Such racial balancing could not, in the Chief Justice's view, amount to a compelling governmental interest even if pursued in the name of racial diversity or racial integration. In another portion of the plurality opinion not joined by Justice Kennedy, Chief Justice Roberts criticized Justice Breyer's dissent for misapplying precedents that recognized a compelling interest in remedying past discrimination. According to the Chief Justice, the Court has recognized a compelling interest in remedying past discrimination when that discrimination is caused by governmental action but not when caused by other factors, such as social or economic pressures. Noting that the Seattle school district was never segregated due to state action and the Louisville school district had eliminated all vestiges of state segregation, the Chief Justice therefore argued that the cases cited by Justice Breyer as precedents for race-conscious school integration efforts were inapplicable to the current case. The plurality opinion concluded with a discussion of Brown v. Board of Education , in which the Court held that the deliberate segregation of schoolchildren by race was unconstitutional. According to the plurality: Before Brown , schoolchildren were told where they could and could not go to school based on the color of their skin. The school districts in these cases have not carried the heavy burden of demonstrating that we should allow this once again--even for very different reasons.... The way to stop discrimination on the basis of race is to stop discriminating on the basis of race. Although he joined the Court in striking down the school plans, Justice Kennedy wrote a separate concurring opinion that provides additional insight into how the Justices might handle future cases involving the consideration of race in the educational context. As noted above, Justice Kennedy declined to sign on to the plurality opinion in full, in part because he disagreed with its implication that diversity in elementary and secondary education, at least as properly defined, does not serve a compelling governmental interest. According to Justice Kennedy, "[d]iversity, depending on its meaning and definition, is a compelling educational goal a school district may pursue," but neither Seattle nor Louisville had shown that its plans served a compelling interest in promoting diversity or that the plans were narrowly tailored to achieve that goal. Justice Kennedy also pointedly criticized the plurality opinion for "imply[ing] an all-too-unyielding insistence that race cannot be a factor in instances when, in my view, it may be taken into account. ...In the administration of public schools by the state and local authorities, it is permissible to consider the racial makeup of schools and to adopt general policies to encourage a diverse student body, one aspect of which is its racial composition." Justice Kennedy identified several ways in which schools, in his view, could constitutionally pursue racial diversity or avoid racial isolation, including strategic site selection of new schools, altering attendance zones, providing resources for special programs, and recruiting students and faculty. According to Justice Kennedy, such measures would be constitutional because, while race-conscious, they are not based on classifications that treat individuals differently based on race. However, Justice Kennedy would not limit schools to facially neutral methods of achieving diversity, saying that racial classifications might be permissible if based on "a more nuanced, individual evaluation of school needs and student characteristics" similar to the plan approved in Grutter . Although no other justice joined his concurrence, Justice Kennedy's unique role in providing the pivotal swing vote in the case makes his concurring opinion significant to any future legal developments regarding the use of racial classifications in the education context. Although Justice Thomas joined the plurality opinion written by Chief Justice Roberts in full, he also wrote a separate concurring opinion that took issue with certain aspects of Justice Breyer's dissent. Among other things, Justice Thomas disagreed with the dissent's assertion that the school plans were necessary to combat school resegregation, arguing that neither Seattle nor Louisville faced the type of intentional state action to separate the races that the school districts in Brown had. In addition, Justice Thomas contested the dissent's argument that a less strict standard of review should apply when racial classifications are used for benign purposes, in part because Justice Thomas disagreed that the school plans--which, he wrote, inevitably exclude some individuals based on race and therefore may exacerbate racial tension--are as benign as the dissent asserted. More importantly, Justice Thomas argued that the perception of what constitutes a benign use of race-conscious measures is nothing more than a reflection of current social practice that relies too heavily on the good intentions of current public officials. According to Justice Thomas, "if our history has taught us anything, it has taught us to beware of elites bearing racial theories," adding in a footnote, "Justice Breyer's good intentions, which I do not doubt, have the shelf life of Justice Breyer's tenure." As noted above, both Justices Stevens and Breyer dissented from the Court's decision to strike down the school plans. In his brief dissent, Justice Stevens, who also joined Justice Breyer's dissent, described the Court's reliance on Brown as a "cruel irony" because it ignored the historical context in which Brown was decided and the ways in which subsequent precedents applied the landmark decision to uphold school integration efforts. Meanwhile, in a lengthy and passionate dissent nearly twice as long as Chief Justice Roberts's opinion, Justice Breyer argued that the Court's holding "distorts precedent, ... misapplies the relevant constitutional principles, ... announces legal rules that will obstruct efforts by state and local governments to deal effectively with the growing resegregation of public schools, ... threatens to substitute for present calm a disruptive round of race-related litigation, and ... undermines Brown ' s promise of integrated primary and secondary education that local communities have sought to make a reality." Although the Court's decision to strike down the Seattle and Louisville school assignment and transfer plans will have a profound impact on similar plans at many of the nation's elementary and secondary schools, the Parents Involved in Community Schools case did not completely foreclose the possibility that school districts may constitutionally pursue certain measures to avoid racial isolation and promote racial diversity in their schools. However, it is not entirely clear what these measures might entail. While the methods identified in Justice Kennedy's concurring opinion--such as engaging in strategic site selection of new schools, altering attendance zones, providing resources for special programs, and recruiting students and faculty--seem more likely to survive judicial scrutiny, the fate of other kinds of race-conscious school plans may become apparent only as a result of legal developments that emerge over time.

The diversity rationale for affirmative action in public education has long been a topic of political and legal controversy. Many colleges and universities have established affirmative action policies not only to remedy past discrimination, but also to achieve a racially and ethnically diverse student body or faculty. Although the Supreme Court has recognized that the use of race-based policies to promote diversity in higher education may be constitutional, the Court had never, until recently, considered whether diversity is a constitutionally permissible goal in the elementary and secondary education setting. To resolve this question, the Supreme Court recently agreed to review two cases that involved the use of race to maintain racially diverse public schools and to avoid racial segregation. In a consolidated ruling in Parents Involved in Community Schools v. Seattle School District No. 1, the Court held that the Seattle and Louisville school plans at issue violated the equal protection guarantee of the Fourteenth Amendment. This report provides an overview of the Court's decision, as well as a discussion of its implications for future educational efforts to promote racial diversity.

To better confront the military demands of a post-Cold War world, as well as to reduce costs of maintaining excess military infrastructure, Congress authorizes the Department of Defense (DOD) to realign or close military bases. Following an examination of its military forces and installations, the department compiles a list of recommended Base Realignment and Closing (BRAC) actions. This proposed list of base closures and realignments is presented to an independent BRAC Commission, which reviews the proposed actions and sends the list to the President with any recommended changes. After the President reviews and approves the list, it is sent to Congress. The recommended list is automatically enacted unless Congress passes a joint resolution disapproving the list as a whole and sustains it over a potential presidential veto. Following the actual base closings and realignments, the DOD carries out an environmental remediation plan to enable the conveyance of surplus federal land to other entities. Four separate BRAC rounds were initiated in 1988, 1991, 1993, and 1995. In total, 97 bases were closed or realigned under these rounds. By 2001, the DOD had implemented the recommendations from the previous rounds, although significant environmental remediation and asset transfers remain unfinished in many of the affected communities. Congress authorized a fifth round of military base realignments and closures for 2005 through the National Defense Authorization Act of 2002 ( P.L. 107 - 107 ). A primary objective of the 2005 BRAC round was "joint activity"--integration and realignment of cross-service functions in such areas as industrial, supply and storage facilities, technical, training, headquarters, and support activities. The list of recommended actions to achieve these objectives was presented to the BRAC Commission on May 13, 2005. The report became law on November 10, 2005. Small-area economic impact analysis can be a difficult and imprecise undertaking. Assumptions and supporting statistical reasoning can lead to predictions that are, in hindsight at least, inaccurate. For example, multiplier effects--measures of the rate at which a direct effect (e.g., base job losses) creates indirect effects--are central elements in estimating the socioeconomic impact of a base closing or realignment. If, for example, one assumes that a base job has a large indirect employment multiplier (e.g., 2.5-3.0), then for each direct job lost, employment indirectly related to the base job within some defined geographic area is also predicted to be lost. Similarly, an income multiplier allows one to estimate the total income generated by a military base and the resulting income loss or gain within a region. Assumptions about the extent to which base incomes are spent within a particular community can lead to very different assessments of the impacts from the loss of that income. A shift to a smaller employment multiplier will show a much reduced total employment loss from closure. Using data from military base closings between 1971 and 1994, one 2001 study estimated multipliers of less than one and concluded that employment impacts were mostly limited to the direct job loss associated with military transfers out of the region. On average, the study found that per capita income was little affected by the closures. Base closings in communities that have been declining economically for some time, however, may produce impacts different from (and possibly more severe than) those of base closings in communities where growth and economic diversification are more in evidence. The relative strength or weakness of the national or regional economy also can strongly influence the magnitude of community effects from base closure or realignment and the length of time for economic recovery. Evidence from earlier base closures suggests that the impacts can be less than expected because, unlike many other major employers, military bases may be relatively isolated economic entities, purchasing base needs outside the community and spending income at the base rather than in the local community. Local communities are also concerned about the fiscal impacts borne by local governments, especially rural governments. Revenue from property taxes, sales tax, licenses and permits, and state and federal aid is influenced by population gains and losses. With population loss, and related changes to local income, base closures can affect the ability of local governments to raise revenue and support existing services. Similarly, with significant population increases, a community may find greater demand for public services (e.g., transportation, schools, public safety, water and sewerage) without the necessary revenue to support the additional demand. Even where increased revenue can contribute to mitigating the impact of base expansion, the planning and adjustment costs impose other burdens on communities and residents. Local government expenditures and services can also be affected by closure and realignment, depending on the extent to which the military base is integrated into the community's fiscal planning. Here as well, statistical assumptions can lead to significant differences in estimated impact. For example, an economic development analyst estimated that the closure of Hanscom Air Force Base would mean the loss of about $200 million in defense contracts to Massachusetts's firms. Another analysis estimated the same losses at $3 billion. A review of impacts on local government revenue and expenditures, however, generally confirmed that these impacts were, like those impacts affecting the economy, not as severe as had been originally projected. The announcements of previous BRAC Commissions have been greeted in affected communities and elsewhere by significant concern over the potential consequences of closing or significantly realigning a military installation. Military bases in many rural areas, for example, provide an economic anchor to local communities. Even where the local and regional economy is more diversified, military bases provide a strong social and cultural identification that can be shaken by the announcement that a base is closing or being downsized. Not only can there be an immediate impact from the loss of military and civilian jobs, local tax revenues also can decline, leaving counties and communities less able to provide public services. School districts with a high proportion of children from military families can experience significant declines in enrollment. With these effects can come related reductions in state and/or federal funding. With the importance given to joint service activity in the 2005 BRAC round, some bases saw their functions moved to other bases. Other bases, however, are expanding and creating impacts on schools, housing, traffic, and local government services (e.g., Fort Belvoir, Virginia). DOD's Office of Economic Adjustment identified 20 locations where expected growth as a result of force realignments in FY2006-FY2012 would adversely affect surrounding communities. Communities have until September 15, 2011, to implement the changes specified in the BRAC Commission Report. While it is predictable that communities will react to news of a base's closing with concern and anxiety, evidence from past BRAC rounds shows that local economies are, in many cases, more resilient after an economic shock than they expected. Some worst-case scenarios predicted for communities did not occur, perhaps because they were based, in part, on assumptions about economic multipliers, the perceived versus actual role of a base in the local economy, and over-generalization from individual cases where there was significant economic dislocation. Many communities that developed a comprehensive and realistic plan for economic redevelopment were able to replace many of the lost jobs and restore lost income. The DOD programs for assisting communities with base redevelopment (e.g., the Office of Economic Adjustment) have also played a role in mitigating some of the effects of base closure and/or realignment. Some communities came to regard the closing as an opportunity for revitalizing and diversifying their economies. Other communities found they were in stronger economic shape after several years than they thought possible on first learning their bases were closing. Coping with the closure in the short term and revitalizing communities over the long haul can, nonetheless, be daunting tasks. Not all communities recover, and for those that do, the recovery can be uneven. The Government Accountability Office (GAO) found that many communities in 2005 were still recovering from prior closures. Rural areas in particular can find the loss of a base and the revitalization of their communities especially difficult challenges. The effects on individuals can also vary. For example, persons who lose jobs in a closure may not have the kinds of skills needed by the economic activity generated by the redevelopment. Individuals may relocate to other regions where the jobs they find may not match the wages of the jobs lost. Significant environmental cleanup costs from toxic elements at military installations can delay the transfer of the base to local authorities and limit the kinds of redevelopment options available to a community. In some respects, a closed military base shares similarities with other closed industrial facilities such as steel mills, oil refineries, or port facilities. Research and previous economic development experience suggest that converting a closed military base into a source of new competitive advantage is a major community effort. Some bases closed in earlier BRAC rounds have been successfully redeveloped into manufacturing facilities, airports, and research laboratories (e.g., Charleston, SC). Bases also may hold certain advantages for redevelopment that are not shared by other industrial sites. Pricing for the closed bases might be steeply discounted and liability for environmental protection indemnified. Federal grants and incentives also exist to aid community redevelopment efforts. Once a base is slated for closing, consideration of property transfer mechanisms, the extent of environmental cleanup necessary, and a realistic base reuse plan for the transferred property become central elements in organizing the economic development process. Establishing a Local Redevelopment Authority (LRA) with power to assume ownership of the transferred land is a necessary initial step in the economic redevelopment process. The LRA must be approved by the DOD before property can be transferred. The DOD's Office of Economic Adjustment (OEA) is a resource available to communities seeking assistance in managing the impact of a base closing or realignment. The OEA awards planning grants to communities and also provides technical and planning assistance to local redevelopment authorities. By 2002, a cumulative $1.9 billion in DOD and other federal funds had been expended to assist communities affected by base closures. Other sources of federal assistance may also be available to assist communities in recovering from a base closure. Given the variance in the economic conditions of the local area and the usable facilities left behind, there is no single template for redeveloping a closed military base. One generality that might be applied to almost all cases, however, is that the sooner economic redevelopment can begin after base closure, the better for local communities. Base closure can be economically difficult for a community, but closure with a long lag in which the closed base is essentially a hole in the local economy can be worse. While many factors can delay the economic redevelopment of a closed base, the most common may be the need for environmental cleanup of the closed property. Except for limited circumstances, property from a closed military base must be cleaned of environmental contamination before being transferred for redevelopment. The degree of cleanup and the timetable for completion, however, is left to DOD which operates under the appropriations authorized by Congress. Because of the extent of contamination and magnitude of costs involved once funds are allocated, the process of environmental cleanup can be lengthy. A complicating factor in the cleanup process can be the different levels of cleanup that might be completed. As of FY2009, 88% of sites from bases closed in prior BRAC rounds (so-called Legacy BRAC sites) that were not contaminated with munitions had been readied for transfer to local development authorities. Approximately 54% of the sites from the 2005 BRAC that were not contaminated with munitions have now been readied for transfer to local development authorities. For sites with munitions contamination, 68% of Legacy BRAC sites and 33% of 2005 BRAC sites had been readied for transfer at the end of FY2009. Land intended for use as housing or schools, for example, must be cleaned to a greater degree than land intended for industrial use. DOD, however, is not legally required to clean land past the point needed for industrial use. Sites that have been cleaned to DOD's satisfaction and readied for transfer to local authorities, may not have actually been transferred. When a community desires an ultimate land use that would require a greater level of cleanup than that done by DOD, this may result in a property being left vacant until either another use is found or until additional cleanup is done. In general, previous base closures suggest that communities face many specialized challenges, but there is little strong evidence that the closing of a base is the definitive cause of a general economic calamity in local economies. On the other hand, rural areas could experience substantially greater and longer-term economic dislocation from a base closing than urban and suburban areas. Rural areas with less diversified local economies may be more dependent on the base as a key economic asset than urban/suburban economies. Communities where bases are recommended for significant expansion can also find the effects of growth a major challenge. Over the five- to six-year phasing out of a base, however, environmental cleanup, successful property transfers to a local redevelopment authority, and widespread community commitment to a sound base reuse plan have been shown to be crucial elements in positioning communities for life without a military installation.

The most recent Base Realignment and Closure (BRAC) Commission submitted its final report to the Administration on September 8, 2005. Implementation of the BRAC round was officially completed on September 15, 2011. In the report, the commission rejected 13 of the initial Department of Defense recommendations, significantly modified the recommendations for 13 other installations, and approved 22 major closures. The loss of related jobs, and efforts to replace them and to implement a viable base reuse plan, can pose significant challenges for affected communities. However, while base closures and realignments often create socioeconomic distress in communities initially, research has shown that they generally have not had the dire effects that many communities expected. For rural areas, however, the impacts can be greater and the economic recovery slower. Early planning and decisive leadership from officials are important factors in addressing local socioeconomic impacts from base realignment and closing. Drawing from existing studies, this report assesses the potential community impacts and proposals for minimizing those impacts. For additional information on the BRAC process, see CRS Report RL32216, Military Base Closures: Implementing the 2005 Round, by [author name scrubbed]; and CRS Report RL33766, Military Base Closures and Realignment: Status of the 2005 Implementation Plan, by [author name scrubbed].

Senate Rule XXVI establishes specific requirements for Senate committee procedures. In addition, each Senate committee is required to adopt rules, which may "not be inconsistent with the Rules of the Senate." Senate committees also operate according to additional established practices that are not necessarily reflected in their adopted rules. The requirement that each committee must adopt its own set of rules dates to the 1970 Legislative Reorganization Act (P.L. 91-510). That law built on the 1946 Legislative Reorganization Act (P.L. 79-601), which set out some requirements to which most Senate committees must adhere. Under the provisions of the 1970 law (now incorporated into Senate Rule XXVI, paragraph 2), Senate committees must adopt their rules and generally have them printed in the Congressional Record not later than March 1 of the first year of a Congress. Typically, the Senate also publishes a compilation of the rules of all the committees each Congress, and some individual committees also publish their rules as committee prints. Committee rules govern actions taken in committee proceedings only, and they are enforced in relation thereto by the committee's members in a similar way that rules enforcement occurs on the Senate floor. There is generally no means by which the Senate can enforce committee rules at a later point on the floor. So long as the committee met the requirement of Senate Rule XXVI that a physical majority be present for reporting a measure or matter, no point of order lies against the measure or matter on the floor on the grounds that the committee earlier acted in violation of other procedural requirements. Beyond the requirements of Senate rules and a committee's own formal rules, many committees have traditions or practices they follow that can affect their procedures. (One committee, for example, does not allow Senators to offer second-degree amendments during committee markups, though this restriction is not contained in either the Senate or the committee's rules.) An accounting of any such informal practices that committees might observe is not provided below. This report first provides a brief overview of Senate rules as they pertain to committees. The report then provides four tables that summarize each committee's rules in regard to meeting day, hearing and meeting notice requirements, and scheduling of witnesses ( Table 1 ); hearing quorum, business quorum, and amendment filing requirements ( Table 2 ); proxy voting, polling, and nominations ( Table 3 ); and investigations and subpoenas ( Table 4 ). Table 4 also identifies selected unique provisions some committees have included in their rules. The tables, however, represent only a portion of each committee's rules. Provisions of the rules that are substantially similar to or essentially restatements of the Senate's standing rules are not included. Although there is some latitude for committees to set their own rules, the standing rules of the Senate set out specific requirements that each committee must follow. The provisions listed below are taken from Rule XXVI of the Standing Rules of the Senate. (Some committees reiterate these rules in their own rules, but even for those committees that do not, these restrictions apply.) This is not an exhaustive explanation of Senate rules and their impact on committees. Rather, this summary is intended to provide a background against which to understand each committee's individual rules that govern key committee activities. Rules. Each committee must adopt rules; those rules must generally be published in the Congressional Record not later than March 1 of the first year of each Congress. If a committee adopts an amendment to its rules later in the Congress, that change becomes effective only when it is published in the Record (Rule XXVI, paragraph 2). Meetings. Committees and subcommittees are authorized to meet and hold hearings when the Senate is in session and when it has recessed or adjourned. A committee may not meet on any day (1) after the Senate has been in session for two hours, or (2) after 2 p.m. when the Senate is in session. Each committee must designate a regular day on which to meet weekly, biweekly, or monthly. (This requirement does not apply to the Appropriations Committee.) A committee is to announce the date, place, and subject of each hearing at least one week in advance, though any committee may waive this requirement for "good cause" (Rule XXVI, paragraph 5(a); Rule XXVI, paragraph 3). Special meeting. Three members of a committee may make a written request to the chair to call a special meeting. The chair then has three calendar days in which to schedule the meeting, which is to take place within the next seven calendar days. If the chair fails to do so, a majority of the committee members can file a written motion to hold the meeting at a certain date and hour (Rule XXVI, paragraph 3). Open meetings. Unless closed for reasons specified in Senate rules (such as a need to protect national security information), committee and subcommittee meetings, including hearings, are open to the public. When a committee or subcommittee schedules or cancels a meeting, it is required to provide that information--including the time, place, and purpose of the meeting--for inclusion in the Senate's computerized schedule information system. Any hearing that is open to the public may also be open to radio and television broadcasting at the committee's discretion. Committees and subcommittees may adopt rules to govern how the media may broadcast the event. A vote by the committee in open session is required to close a meeting (Rule XXVI, paragraph 5(b)). Quorums. Committees may set a quorum for doing business so long as it is not less than one-third of the membership. A majority of a committee must be physically present when the committee votes to order the reporting of any measure, matter, or recommendation. Agreeing to a motion to order a measure or matter reported requires the support of a majority of the members who are present. Proxies cannot be used to constitute a quorum (Rule XXVI paragraph 7(a)(1)). Meeting r ecord . All committees must make public a video, transcript, or audio recording of each open hearing of the committee within 21 days of the hearing. These shall be made available to the public "through the Internet" (Rule XXVI, paragraph 5(2)(A)). Proxy voting. A committee may adopt rules permitting proxy voting. A committee may not permit a proxy vote to be cast unless the absent Senator has been notified about the question to be decided and has requested that his or her vote be cast by proxy. A committee may prohibit the use of proxy votes on votes to report. However, even if a committee allows proxies to be cast on a motion to report, proxies cannot make the difference in ordering measure reported, though they can prevent it (Rule XXVI, paragraph 7(a)(3)). Investigations and subpoenas. Each standing committees (and its subcommittees) is empowered to investigate matters within its jurisdiction and issue subpoenas for persons and papers (Rule XXVI, paragraph 1). Witnesses selected by the minority. During hearings on any measure or matter, the minority shall be allowed to select witnesses to testify on at least one day when the chair receives such a request from a majority of the minority party members. This provision does not apply to the Appropriations Committee (Rule XXVI, paragraph 4(d)). Reporting. A Senate committee may report original bills and resolutions in addition to those that have been referred to it. As stated above in the quorum requirement, a majority of the committee must be physically present for a measure or matter to be reported, and a majority of those present is required to order a measure or matter favorably reported. A Senate committee is not required to issue a written report to accompany a measure or matter it reports. If the committee does write such a report, Senate rules specify a series of required elements that must be included in the report (Rule XXVI, paragraph 7(a)(3); Rule XXVI, paragraph 10(c)). Table 1 summarizes each's committee's rules in three areas: meeting day(s), notice requirements for meetings and hearings, and witness selection provisions. Many committees repeat or otherwise incorporate the provisions of Senate Rule XXVI, paragraph 4(a), which, as noted above, requires a week's notice of any hearing (except for the Appropriations and Budget committees) "unless the committee determines that there is good cause to begin such hearing at an earlier date." Provisions in committee rules are identified and explained in this column only to the extent that they provide additional hearing notice requirements, specifically provide the "good cause" authority to certain members (e.g., chair or ranking minority member), or apply the week's notice to meetings other than hearings (such as markups). Similarly, as noted in the report, Senate Rule XXVI, paragraph 4(d) (sometimes referred to as the "minority witness rule"), provides for the calling of additional witnesses in some circumstances (except for the Appropriations Committee). Some committees restate this rule in their own rules. Only committee rule provisions that go further in specifically addressing the selection of witnesses or a right to testify are identified in this column. Table 2 focuses on each's committee's rules on hearing quorums, business quorums, and requirements to file amendments prior to a committee markup. In regard to a business quorum, the "conduct of business" at a committee meeting typically refers to actions (such as debating and voting on amendments ) that allow the committee to proceed on measures up to the point of reporting. Some committees require that a member of the minority party be present for such conduct of business; such provisions are noted below. As noted earlier, Senate Rule XXVI, paragraph 7(a), requires a majority of the committee to be physically present (and a majority of those present to agree) to report out a measure or matter; this is often referred to as a "reporting quorum." The rule allows Senate committees to set lower quorum requirements, though not less than a third of membership for other business besides hearings. Some committees restate the Senate requirement in their own committee rules, but even those committees that do not are bound by the reporting quorum requirement. Table 2 does not identify committee rules that simply restate the reporting quorum requirement unless the committee has added additional requirements to its provisions (e.g., that a reporting quorum must include a member of each party). Though no Senate rules govern the practice, several committees require, in their committee rules, that Senators file with the committee any first-degree amendments they may offer during a committee markup before the committee meets. Such a provision allows the chair and ranking member of the committee to see what kind of issues may come up at the markup and may also allow them to negotiate agreements with amendment sponsors before the formal markup session begins. Some committees distribute such filed amendments in advanced of the markup to allow committee members a chance to examine them. It also provides an opportunity to Senators to draft second-degree amendments to possible first-degree amendments before the markup begins. Table 3 summarizes each's committee's rules on proxy voting, committee polling, and nominations. Since Senate rules require a majority of a committee to be physically present for a vote to report a measure or matter, a committee vote to report an item of business may not rely on the votes cast on behalf of absent Senators (that is, votes by proxy). Some committees effectively restate this requirement in their committee rules by either stating that proxies do not count toward reporting or referencing the proxy provisions of Senate Rule XXVI. However, committees may still allow (or preclude) proxy votes on a motion to report (as well as on other questions so long as members are informed of the issue and request a proxy vote). Table 3 identifies committees that explicitly allow or disallow proxy votes on a motion to report (even though such votes cannot, under Senate rules, count toward the presence of a "reporting quorum" or make the difference in successfully reporting a measure or matter). "Polling" is a method of assessing the position of the committee on a matter without the committee physically coming together. As such, it cannot be used to report out measures or matters, because Senate rules require a physical majority to be present to report a measure or matter. Polling may be used, however, by committees that allow it for internal housekeeping matters before the committee, such as questions concerning staffing or how the committee ought to proceed on a measure or matter. Senate Rule XXVI does not contain provisions specific to committee consideration of presidential nominations. Some committees, however, set out timetables in their rules for action or have other provisions specific to action on nominations. Some committees also provide in their rules that nominees must provide certain information to the committee. Such provisions are not detailed in this table except to the extent that the committee establishes a timetable for action that is connected to such submissions. This column of the table also identifies any committee provisions on whether nominees testify under oath. Table 4 describes selected key committee rules in relation to investigations and subpoenas. Note that some Senate committees do not have specific rules providing processes for committee investigations, and many also do not set out procedures for issuing subpoenas. The lack of any investigation or subpoena provisions does not mean the committees cannot conduct investigations or issue subpoenas; rather, the process for doing so is not specified in the committee's written rules. Some committees have provisions that are generally not included in other committee rules. Selected notable examples (that do not fit into other categories in other tables) are summarized in the last column of Table 4 .

Senate Rule XXVI establishes specific requirements for certain Senate committee procedures. In addition, each Senate committee is required to adopt rules to govern its own proceedings. These rules may "not be inconsistent with the Rules of the Senate." Senate committees may also operate according to additional established practices that are not necessarily reflected in their adopted rules but are not specifically addressed by Senate rules. In sum, Senate committees are allowed some latitude to establish tailored procedures to govern certain activities, which can result in significant variation in the way different committees operate. This report first provides a brief overview of Senate rules as they pertain to committee actions. The report then provides tables that summarize selected, key features of each committee's rules in regard to meeting day, hearing and meeting notice requirements, scheduling of witnesses, hearing quorum, business quorum, amendment filing requirements, proxy voting, polling, nominations, investigations, and subpoenas. In addition, the report looks at selected unique provisions some committees have included in their rules in the miscellaneous category. The tables, however, represent only a portion of each committee's rules, and provisions of the rules that are substantially similar to or essentially restatements of the Senate's Standing Rules are not included. This report will be not be updated further during the 114th Congress.

DOD in 2001 adopted a new approach for developing new weapon systems, called evolutionary acquisition with spiral development (EA/SD), as its preferred standard. EA/SD, which is referred to informally (though not entirely accurately) as spiral development, is an outgrowth of the defense acquisition reform movement of the 1990s, and is part of DOD's effort to make its acquisition system more responsive to rapid changes in threats, technology, and warfighter needs. It is also intended to increase DOD's control over program costs, DOD program-manager accountability, and participation of high-tech firms in DOD weapon acquisition programs. DOD's goals in using EA/SD are to: get useful increments of new capability into the hands of U.S. personnel more quickly; take better advantage of user feedback in refining system requirements and developing subsequent increments of capability; mitigate technical development risk in weapon programs that are to employ new or emerging technologies; and facilitate the periodic injection of new technology into weapons over their life cycles, so as to better keep pace with technological changes. Under DOD's previous weapon acquisition method, now known as single step to full capability (SSFC), DOD would first define a specific performance requirement to be met, and then work, usually for a period of more than 10 years in the case of a complex weapon system like an aircraft or ship, to develop and build a design that, upon first deployment, was intended to meet 100% of that requirement. The core idea of EA/SD is to set aside the quest for 100% fulfillment of the requirement in the initial version of the weapon and instead rapidly develop an initial version that meets some fraction (for example, 50% to 60%) of the requirement. Field experience with this initial version is then be used to develop later versions, or blocks, of the weapon that meet an increasing fraction of the requirement, until a version is eventually developed that meets the 100% standard. Figure 1 below details the process for each block. Each block includes four phases for conceiving, developing, producing, and sustaining (i.e., supporting) a weapon system. Each phase is governed by certain acquisition rules and regulations, including entrance and exit criteria, and is subject to the requirements process, including the Initial Capabilities Document (ICD) and Capability Development Document (CDD). Each block includes its own acquisition contracts and fully funded budgets for a defined time period. As shown in Figure 1 , spiral development occurs as the second phase within a block . Spiral development is an iterative process for developing a weapon system's capabilities in which the developer, tester, and user to interact with one another so as refine (i.e., spiral down to a specific understanding of) the system's operational requirements. Spiral interaction can change the course of a system's technology development. Although EA/SD differs from SSFC in its use of block development from the outset of a program, from a program-management perspective, EA/SD is similar in some areas to SSFC, including the development milestones and reviews that are used at each development stage. EA/SD, however, is intended to be more flexible than SSFC in terms of permitting changes in a program's requirements or development path resulting from changes in threats, technology, or warfighter needs. EA/SD is also intended to be more flexible than SSFC regarding entry points into the acquisition process. Under SSFC, the dominant entry point was the beginning. Under EA/SD, in contrast, programs can enter various phases of any block (A, B, or C in Figure 1 ), depending on the maturity of the program. Under EA/SD, the final desired capability of the system can be determined in two ways--at the beginning of the program, with the content of each deployable block determined by well-understood (i.e., mature) key technologies, or along the way, with the content of each block determined by success or failure in developing less-well-understood (i.e., emerging) technologies or the evolving needs of the military user. Applying EA/SD at the outset of large weapon acquisition programs, such as the ballistic missile defense program, can create significant initial uncertainty regarding the design and ultimate cost of the systems that will eventually be procured under the program, the number of systems to be procured, and the schedule for procuring them. Applying EA/SD to other programs, particularly those intended to develop more up-to-date subsystems for improving existing weapons such as the F-16 fighter or M-1 tank, can produce much less uncertainty regarding the program's ultimate outcome. Although DOD used EA/SD for years on a somewhat limited basis, DOD decided in 2001 that EA/SD would henceforth be the "preferred" (i.e., standard or default) acquisition strategy for all types of weapon acquisition programs--newly initiated programs, existing programs for developing new weapons, and programs for upgrading weapons already in existence. EA/SD was elevated in prominence that year when DOD announced that it was applying EA/SD to its ballistic missile defense program and that the Navy's program for a new family of surface combatants would be an EA/SD program. Several defense programs are now using EA/SD. The ballistic missile defense program is a more complex case than others because it includes multiple weapon systems, some existing and some in initial development, in different phases and blocks of development. In addition, although the ballistic missile defense program has embraced most of the EA/SD model (notably, the possible absence of ultimate cost and timeline projections), it differs from other programs being pursued under EA/SD because it operates under different oversight rules instituted in January 2002 by Defense Secretary Rumsfeld. A November 2003 General Accounting Office (GAO) report on EA/SD prepared at the direction of the Senate Armed Services Committee (see " Legislative Activity " section below) concluded the following: DOD has made major improvements to its acquisition policy by adopting knowledge-based, evolutionary practices used by successful commercial companies. If properly applied, these best practices can put DOD's decision makers in a better position to deliver high-quality products on time and within budget.... The next step is for DOD to provide the necessary controls to ensure a knowledge-based, evolutionary approach is followed. For example, the policy does not establish measures to gauge design and manufacturing knowledge at critical junctures in the product development process. Without specific requirements to demonstrate knowledge at key points, the policy allows significant unknowns to be judged as acceptable risks, leaving an opening for decision makers to make uninformed decisions about continuing product development. DOD was responsive to the requirements in the Defense Authorization Act for Fiscal Year 2003 [see " Legislative Activity " section below].... This [GAO] report makes recommendations that the Secretary of Defense strengthen DOD's acquisition policy by requiring additional controls to ensure decision makers will follow a knowledge-based, evolutionary approach. DOD partially concurred with our recommendations. DOD believes the current acquisition framework includes the controls necessary to achieve effective results, but department officials will continue to monitor the process to determine whether other controls are needed to achieve the best possible outcomes. DOD agreed it should record and justify program decisions for moving from one stage of development to next but did not agree with the need to issue a report outside of the department. EA/SD poses potential issues for Congress regarding DOD and congressional oversight of weapon acquisition programs. Some of these issues appear to arise out of uncertainty over how EA/SD differs from the SSFC approach; others appear to arise out of the features of EA/SD itself. One issue for Congress, addressed in the GAO report, is whether DOD has established adequate rules and regulations for conducting internal oversight of EA/SD programs. Some observers have expressed concern about this issue, particularly with regard to the spiral development phases of programs. In support of this concern, they have cited budget justification documents for the ballistic missile program, which have included some references to block development but have provided incomplete information on how much funding is spent for specific blocks, over what period of time, and on what progress has been made to date in each block. Supporters of EA/SD argue that DOD is fully aware of the need for adequate oversight and will take steps to ensure that it is provided. Potential questions for Congress include: How does DOD oversight for EA/SD programs compare to DOD oversight of SSFC weapon acquisition programs in terms of frequency and nature of reviews, information required to be submitted to reviewing authorities, and evaluation and reporting by reviewing authorities? Will DOD oversight procedures, and review bodies be the same for all EA/SD programs, or will they vary from program to program? Another issue for Congress is how to carry out its responsibility to allocate defense spending. EA/SD poses potentially significant issues for congressional oversight, particularly for newly initiated weapon acquisition programs, in three areas: Ambiguous initial program description. Programs initiated under EA/SD may not be well defined at the outset in terms of system design, quantities to be procured, development and procurement costs, and program schedule. These are key program characteristics that Congress in the past has wanted to understand in some detail before deciding whether to approve the start of a new weapon acquisition program. EA/SD can thus put Congress in the position of deciding whether to approve the start of a new a program with less information than it has had in the past. Lack of well-defined benchmarks. A corollary to the above is that Congress may not, years later, have well-defined initial program benchmarks against which to measure the performance of the military service managing the program or the contractor. Funding projections potentially more volatile. Although projections of future funding requirements for weapons acquisition programs are subject to change for various reasons, funding projections for EA/SD programs may be subject to even greater volatility due to each program's inherent potential for repeated refinements in performance requirements or technical approaches. As a result, any long-range projections of future funding requirements for EA/SD programs may be even less reliable than projections for systems pursued under the SSFC approach. Supporters of EA/SD argue that it can improve congressional oversight of DOD weapon acquisition programs because the information that DOD provides for a given program will focus on the specific block that is proposed for development over the next few years. This information, they argue, will be more reliable--and thus better for Congress to use in conducting its oversight role--than the kind of long-range information that used to be provided under the SSFC approach. Under SSFC, DOD provided information about the entire projected program, stretching many years into the future. Such information, supporters of EA/SD argue, may appear more complete, but is not very reliable because it requires projecting program-related events well into the future. DOD's history in accurately projecting such events, they argue, is far from perfect. As a result, they argue, information provided in connection with an SSFC weapon acquisition program can give Congress the illusion--but not the reality--of understanding the outlines of the entire program. On the other hand, critics of EA/SD contend that it has the potential for drawing Congress into programs to a point where extrication becomes difficult if not impossible, and without a clear idea of a program's ultimate objectives. Potential questions for Congress and DOD regarding congressional oversight of EA/SD programs include the following: What might be the impact, on congressional approval of new weapon acquisition programs and subsequent congressional oversight of those programs, of having limited initial detail in terms of system design, quantities to be procured, procurement schedules, and total costs? How might congressional oversight of weapon development programs be affected if program information with longer time horizons but potentially less reliability is exchanged for program information with potentially greater short-term reliability--but, without previously available, if imperfect, estimates of full program costs? To what extent might DOD's new preference for EA/SD be influenced, as some critics contend, by the knowledge that it might relieve DOD of the responsibility for providing specific answers to congressional questions regarding system architecture, effectiveness, time lines, long-term strategic implications and cost? Section 231 of H.R. 5122 / P.L. 109-364 (conference report H.Rept. 109-702 of September 29, 2006) would, among other things, require DOD to review and revise policies and practices on weapon test and evaluation in light of new acquisition approaches, including programs conducted pursuant to authority for spiral development granted in Section 803 of P.L. 107-314 (see below), or other authority for conducting incremental acquisition programs. In its report ( S.Rept. 108-46 of May 13, 2003, page 346) on S. 1050 , the Senate Armed Services Committee expressed support for incremental acquisition and directed GAO "to assess current acquisition policies and regulations and to determine whether: (1) the policies support knowledge-based, evolutionary acquisitions; (2) the regulations enforcing these policies provide the necessary controls to ensure the Department's intent is followed; and (3) the policies are responsive to concerns expressed by the committee in [ P.L. 107-314 ]." As discussed above, GAO submitted the required report in November 2003. Section 802 of the conference report ( H.Rept. 107-772 of November 12, 2002) on the FY2003 defense authorization act ( H.R. 4546 / P.L. 107-314 of December 2, 2002) required DOD to report on how it planned to apply to EA/SD programs certain statutory and regulatory requirements for major DOD acquisition programs. Section 803 set forth conditions to be met before a DOD acquisition program can be pursued as an EA/SD effort, and required DOD provide annual status reports for the next five years on each research and development program being pursued under EA/SD. Section 132 required the Air Force to submit to Congress a list of programs that it had designated as acquisition reform "pathfinder programs," set forth conditions under which those programs can proceed, and applied to them the requirement for filing status reports established under Section 803. These provisions are also discussed on pages 455-456 and 667-668 of the report. The Senate Armed Services Committee, in its report ( S.Rept. 107-151 of May 15 [legislative day, May 9], 2002) on the FY2003 defense authorization bill ( S. 2514 ), included similar provisions and commented extensively on the EA/SD process (see pages 94 and 333-335).

The Department of Defense (DOD) in 2001 adopted a new approach for developing major weapon systems, called evolutionary acquisition with spiral development (EA/SD), as its preferred standard. EA/SD is intended to make DOD's acquisition system more responsive to rapid changes in military needs. EA/SD poses potentially important challenges for Congress in carrying out its legislative functions, particularly committing to and effectively overseeing DOD weapon acquisition programs. This report will be updated as events warrant.

Congress's contempt power is the means by which Congress responds to certain acts that in its view obstruct the legislative process. Contempt may be used either to coerce compliance, punish the contemnor, and/or to remove the obstruction. Although any action that directly obstructs the effort of Congress to exercise its constitutional powers may arguably constitute a contempt, in recent decades the contempt power has most often been employed in response to the refusal of a witness to comply with a congressional subpoena--whether in the form of a refusal to provide testimony, or a refusal to produce requested documents. Congress has three formal methods by which it can combat noncompliance with a duly issued subpoena. Each of these methods invokes the authority of a separate branch of government. First, the long dormant inherent contempt power permits Congress to rely on its own constitutional authority to detain and imprison a contemnor until the individual complies with congressional demands. Because the contemnor is generally released once the terms of the subpoena are met, inherent contempt serves the purposes of encouraging compliance with a congressional directive. Second, the criminal contempt statute permits Congress to certify a contempt citation to the executive branch for the criminal prosecution of the contemnor. Criminal contempt serves as punishment for noncompliance with a congressional subpoena, but does not necessarily encourage subsequent acquiescence. Once convicted, the contemnor is not excused from criminal liability if he later chooses to comply with the subpoena. Finally, Congress may rely on the judicial branch to enforce a congressional subpoena. Under this procedure, Congress may seek a civil judgment from a federal court declaring that the individual in question is legally obligated to comply with the congressional subpoena. If the court finds that the party is legally obligated to comply, continued noncompliance may result in the party being held in contempt of court. Where the target of the subpoena is an executive branch official, civil enforcement may be the only practical means by which Congress can effectively ensure compliance with its own subpoena. This report examines the source of Congress's contempt power, analyzes the procedures associated with inherent contempt, criminal contempt, and the civil enforcement of subpoenas, and discusses the obstacles that face Congress in enforcing a contempt action against an executive branch official. A more fully developed and detailed version of this report, complete with sources and references, can be found at CRS Report RL34097, Congress's Contempt Power and the Enforcement of Congressional Subpoenas: Law, History, Practice, and Procedure , by [author name scrubbed] and [author name scrubbed]. The power of Congress to punish for contempt is inextricably related to the power of Congress to investigate. Generally speaking, Congress's authority to investigate and obtain information, including but not limited to confidential information, is extremely broad. While there is no express provision of the Constitution or specific statute authorizing the conduct of congressional oversight or investigations, the Supreme Court has firmly established that such power is essential to the legislative function as to be implied from the general vesting of legislative powers in Congress. The broad legislative authority to seek and enforce informational demands was unequivocally established in two Supreme Court rulings arising out of the 1920s Teapot Dome scandal. In McGrain v. Daugherty , which arose out of the exercise of the Senate's inherent contempt power, the Supreme Court described the power of inquiry, with the accompanying process to enforce it, as "an essential and appropriate auxiliary to the legislative function." The Court explained: A legislative body cannot legislate wisely or effectively in the absence of information respecting the conditions which the legislation is intended to affect or change; and where the legislative body does not itself possess the requisite information--which not infrequently is true--recourse must be had to others who possess it. Experience has taught that mere requests for such information often are unavailing, and also that information which is volunteered is not always accurate or complete; so some means of compulsion are essential to obtain that which is needed. All this was true before and when the Constitution was framed and adopted. In that period the power of inquiry--with enforcing process--was regarded and employed as a necessary and appropriate attribute of the power to legislate--indeed, was treated as inhering in it. Thus there is ample warrant for thinking, as we do, that the constitutional provisions which commit the legislative function to the two houses are intended to include this attribute to the end that the function may be effectively exercised. In Sinclair v. United States, a different witness at the congressional hearings refused to provide answers, and was prosecuted for contempt of Congress. The witness had noted that a lawsuit had been commenced between the government and the Mammoth Oil Company, and declared, "I shall reserve any evidence I may be able to give for those courts ... and shall respectfully decline to answer any questions propounded by your committee." The Supreme Court upheld the witness's conviction for contempt of Congress. The Court considered and rejected in unequivocal terms the witness's contention that the pendency of lawsuits provided an excuse for withholding information. Neither the laws directing that such lawsuits be instituted, nor the lawsuits themselves, "operated to divest the Senate, or the committee, of power further to investigate the actual administration of the land laws." The Court further explained that "[i]t may be conceded that Congress is without authority to compel disclosure for the purpose of aiding the prosecution of pending suits; but the authority of that body, directly or through its committees to require pertinent disclosures in aid of its own constitutional power is not abridged because the information sought to be elicited may also be of use in such suits." Subsequent Supreme Court rulings have consistently reiterated and reinforced the breadth of Congress's investigative authority. For example, in Eastland v. United States Servicemen's Fund , the Court explained that "[t]he scope of [Congress's] power of inquiry ... is as penetrating and far-reaching as the potential power to enact and appropriate under the Constitution." In addition, the Court in Watkins v. United States , described the breadth of the power of inquiry. According to the Court, Congress's power "to conduct investigations is inherent in the legislative process. That power is broad. It encompasses inquiries concerning the administration of existing laws as well as proposed or possibly needed statutes." The Court did not limit the power of congressional inquiry to cases of "wrongdoing." It emphasized, however, that Congress's investigative power is at its peak when the subject is alleged waste, fraud, abuse, or maladministration within a government department. The investigative power, the Court stated, "comprehends probes into departments of the Federal Government to expose corruption, inefficiency, or waste." "[T]he first Congresses" held "inquiries dealing with suspected corruption or mismanagement by government officials" and subsequently, in a series of decisions, "[t]he Court recognized the danger to effective and honest conduct of the Government if the legislature's power to probe corruption in the Executive Branch were unduly hampered." Accordingly, the Court now clearly recognizes "the power of the Congress to inquire into and publicize corruption, maladministration, or inefficiencies in the agencies of Government." Congress's inherent contempt power is not specifically granted by the Constitution, but is considered necessary to investigate and legislate effectively. The validity of the inherent contempt power was upheld in the early Supreme Court decision Anderson v. Dunn and reiterated in McGrain v. Daugherty . Under the inherent contempt power, the individual is brought before the House or Senate by the Sergeant-at-Arms, tried at the bar of the body, and can be imprisoned or detained in the Capitol or perhaps elsewhere. The purpose of the imprisonment or other sanction may be either punitive or coercive. Thus, the witness can be imprisoned for a specified period of time as punishment, or for an indefinite period (but not, at least by the House, beyond the end of a session of the Congress) until he agrees to comply. One commentator has concluded that the procedure followed by the House in the contempt citation challenged in Anderson is typical of that employed in the inherent contempt cases: These traditional methods may be explained by using as an illustration Anderson v. Dunn .... In 1818, a Member of the House of Representatives accused Anderson, a non-Member, of trying to bribe him.... The House adopted a resolution pursuant to which the Speaker ordered the Sergeant-at-Arms to arrest Anderson and bring him before the bar of the House (to answer the charge). When Anderson appeared, the Speaker informed him why he had been brought before the House and asked if he had any requests for assistance in answering the charge. Anderson stated his requests, and the House granted him counsel, compulsory process for defense witnesses, and a copy, of the accusatory letter. Anderson called his witnesses; the House heard and questioned them and him. It then passed a resolution finding him guilty of contempt and directing the Speaker to reprimand him and then to discharge him from custody. The pattern was thereby established of attachment by the Sergeant-at-Arms; appearance before the bar; provision for specification of charges, identification of the accuser, compulsory process, counsel, and a hearing; determination of guilt; imposition of penalty. When a witness is cited for contempt under the inherent contempt process, prompt judicial review appears to be available by means of a petition for a writ of habeas corpus. In such a habeas proceeding, the issues decided by the court might be limited to (a) whether the House or Senate acted in a manner within its jurisdiction, and (b) whether the contempt proceedings complied with minimum due process standards. While Congress would not have to afford a contemnor the whole panoply of procedural rights available to a defendant in criminal proceedings, notice and an opportunity to be heard would have to be granted. Also, some of the requirements imposed by the courts under the statutory criminal contempt procedure (e.g., pertinency of the question asked to the committee's investigation) might be mandated by the due process clause in the case of inherent contempt proceedings. Although many of the inherent contempt precedents have involved incarceration of the contemnor, there may be an argument for the imposition of monetary fines as an alternative. Such a fine would potentially have the advantage of avoiding a court proceeding on habeas corpus grounds, as the contemnor would never be jailed or detained. Drawing on the analogous inherent authority that courts have to impose fines for contemptuous behavior, it appears possible to argue that Congress, in its exercise of a similar inherent function, could impose fines as opposed to incarceration. Support for this argument appears to be contained in dicta from the 1821 Supreme Court decision in Anderson . The Court questioned the "extent of the punishing power which the deliberative assemblies of the Union may assume and exercise on the principle of self preservation" and responded with the following: Analogy, and the nature of the case, furnish the answer--"the least possible power adequate to the end proposed;" which is the power of imprisonment. It may, at first view, and from the history of the practice of our legislative bodies, be thought to extend to other inflictions . But every other will be found to be mere commutation for confinement; since commitment alone is the alternative where the individual proves contumacious. Moreover, in Kilbourn v. Thompson , the Court suggested that in certain cases where the Congress had authority to investigate, it may compel testimony in the same manner and by use of the same means as a court of justice in like cases. Specifically, the Court noted that "[w]hether the power of punishment in either House by fine or imprisonment goes beyond this or not, we are sure that no person can be punished for contumacy as a witness before either House, unless his testimony is required in a matter into which that House has jurisdiction to inquire.... " While the language of these cases and the analogous power possessed by courts seem to suggest the possibility of levying a fine as punishment for contempt of Congress, we are not aware of, and could not locate, any precedent for Congress imposing a fine in the contempt or any other context. In comparison with the other types of contempt proceedings, inherent contempt has the distinction of not requiring the cooperation or assistance of either the executive or judicial branches. The House or Senate can, on its own, conduct summary proceedings and cite the offender for contempt. Furthermore, although the contemnor can seek judicial review by means of a petition for a writ of habeas corpus, the scope of such review may be relatively limited, compared to the plenary review accorded by the courts in cases of conviction under the criminal contempt statute. There are, however, certain limitations of the inherent contempt process. Although the contemnor can be incarcerated until he agrees to comply with the subpoena, imprisonment may not extend beyond the end of the current session of Congress. Moreover, inherent contempt has been described as "unseemly," cumbersome, time-consuming, and relatively ineffective, especially for a modern Congress with a heavy legislative workload, which would be interrupted by a trial at the bar. Because of these drawbacks, the inherent contempt process has not been used by either body since 1935. Proceedings under the inherent contempt power might be facilitated, however, if the initial fact-finding and examination of witnesses were to be held before a special committee--which could be directed to submit findings and recommendations to the full body--with only the final decision as to guilt being made by the full House or Senate. Although generally the proceedings in inherent contempt cases appear to have been conducted at the bar of the house of Congress involved, in at least a few instances proceedings were conducted initially or primarily before a committee, but with the final decision as to whether to hold the person in contempt being made by the full body. Between 1795 and 1857, 14 inherent contempt actions were initiated by the House and Senate, 8 of which can be considered successful in that the contemnor was meted out punishment, agreed to testify, or produced documents. Such inherent contempt proceedings, however, involved a trial at the bar of the chamber concerned and, therefore, were seen by some as time-consuming, cumbersome, and in some instances ineffective--because punishment could not be extended beyond a house's adjournment date. In 1857, a statutory criminal contempt procedure was enacted, largely as a result of a particular proceeding brought in the House of Representatives that year. The statute provides for judicial trial of the contemnor by a United States Attorney rather than a trial at the bar of the House or Senate. It is clear from the floor debates and the subsequent practice of both houses that the legislation was intended as an alternative to the inherent contempt procedure, not as a substitute for it. A criminal contempt referral was made in the case of John W. Wolcott in 1858, but in the ensuing two decades after its enactment most contempt proceedings continued to be handled at the bar of the house, rather than by the criminal contempt method, apparently because Members felt that they would not be able to obtain the desired information from the witness after the criminal proceedings had been instituted. With only minor amendments, those statutory provisions are codified today as 2 U.S.C. Sections 192 and 194. Under 2 U.S.C. Section 192, a person who has been "summoned as a witness" by either house or a committee thereof to testify or to produce documents and who fails to do so, or who appears but refuses to respond to questions, is guilty of a misdemeanor, punishable by a fine of up to $100,000 and imprisonment for up to one year. 2 U.S.C. Section 194 establishes the procedure to be followed by the House or Senate if it chooses to refer a recalcitrant witness to the courts for criminal prosecution rather than try him at the bar of the House or Senate. Under the procedure outlined in Section 194, the following steps precede judicial proceedings under [the statute]: (1) approval by committee; (2) calling up and reading the committee report on the floor; (3) either (if Congress is in session) House approval of a resolution authorizing the Speaker to certify the report to the U.S. Attorney for prosecution, or (if Congress is not in session) an independent determination by the Speaker to certify the report; [and] (4) certification by the Speaker to the appropriate U.S. Attorney for prosecution. The criminal contempt statute and corresponding procedure are punitive in nature. It is used when the House or Senate wants to punish a recalcitrant witness and, by doing so, deter others from similar contumacious conduct. The criminal sanction is not coercive because the witness generally will not be able to purge himself by testifying or supplying subpoenaed documents after he has been voted in contempt by the committee and the House or Senate. Consequently, once a witness has been voted in contempt, he lacks an incentive for cooperating with the committee. However, although the courts have rejected arguments that defendants had purged themselves, in a few instances the House has certified to the U.S. Attorney that further proceedings concerning contempts were not necessary where compliance with subpoenas occurred after contempt citations had been voted but before referral of the cases to grand juries. Under the statute, after a contempt has been certified by the President of the Senate or the Speaker, it is the "duty" of the U.S. Attorney "to bring the matter before the grand jury for its action." It remains unclear whether the "duty" of the U.S. Attorney to present the contempt to the grand jury is mandatory or discretionary. The case law that is most relevant to the question provides conflicting guidance. In Ex parte Frankfeld , the District Court for the District of Columbia granted petitions for writs of habeas corpus sought by two witnesses before the House Committee on Un-American Activities. The witnesses were charged with violating 2 U.S.C. Section 192, and were being held on a warrant based on the affidavit of a committee staff member. The court ordered the witnesses released since the procedure, described as "mandatory" by the court, had not been followed. The court, in dicta , not central to the holding of the case, observed that Congress prescribed that when a committee such as this was confronted with an obdurate witness, a willful witness, perhaps, the committee would report the fact to the House, if it be a House committee, or to the Senate, if it be a Senate committee, and that the Speaker of the House or the President of the Senate should then certify the facts to the district attorney. It seems quite apparent that Congress intended to leave no measure of discretion to either the Speaker of the House or the President of the Senate, under such circumstances, but made the certification of facts to the district attorney a mandatory proceeding, and it left no discretion with the district attorney as to what he should do about it. He is required, under the language of the statute, to submit the facts to the grand jury. Similarly, in United States v. United States House of Representatives , a case that involved the applicability of the Section 192 contempt procedure to an executive branch official, the same district court observed, again in dicta , that after the contempt citation is delivered to the U.S. Attorney, he "is then required to bring the matter before the grand jury." Conversely, in Wilson v. United States , the U.S. Court of Appeals for the District of Columbia Circuit concluded, based in part on the legislative history of the contempt statute and congressional practice under the law, that the "duty" of the Speaker when certifying contempt citations to the U.S. Attorney during adjournments is a discretionary, not a mandatory, one. The court reasoned that despite its mandatory language, the statute had been implemented in a manner that made clear Congress's view that, when it is in session, a committee's contempt resolution can be referred to the U.S. Attorney only after approval by the parent body. When Congress is not in session, review of a committee's contempt citation is provided by the Speaker or President of the Senate, rather than by the full House or Senate. This review of a committee's contempt citation, according to the court, may be inherently discretionary in nature. In Wilson , the defendants' convictions were reversed because the Speaker had certified the contempt citations without exercising his discretion. From this holding it may be possible to argue that because the statute uses similar language when discussing the Speaker's "duty" and the "duty" of the U.S. Attorney, that the U.S. Attorney's function is discretionary as well, and not mandatory as other courts have concluded. Nevertheless, it should be noted that the courts have generally afforded U.S. Attorneys broad prosecutorial discretion, even where a statute uses mandatory language. Where the use of inherent or criminal contempt is unavailable or unwarranted, Congress may appeal to the authority of the judicial branch in an effort to enforce a congressional subpoena. Civil enforcement entails a single house or committee of Congress filing suit in federal district court seeking a declaration that the individual in question is legally obligated to comply with the congressional subpoena. If the court finds that such an obligation exists and issues an order to that effect, continued noncompliance may result in contempt of court--as opposed to contempt of Congress. Although the Senate has existing statutory authority to pursue such an action, there is no corresponding provision applicable to the House. However, the House has previously pursued civil enforcement pursuant to an authorizing resolution. As an alternative to both the inherent contempt power of each house and the criminal contempt statutes, in 1978 Congress enacted a civil enforcement procedure, which is applicable only to the Senate. The statute gives the U.S. District Court for the District of Columbia jurisdiction over a civil action to enforce, secure a declaratory judgment concerning the validity of, or to prevent a threatened failure or refusal to comply with, any subpoena or order issued by the Senate or a committee or subcommittee. Generally such a suit will be brought by the Senate Legal Counsel, on behalf of the Senate or a Senate committee or subcommittee. Pursuant to the statute, the Senate may "ask a court to directly order compliance with [a] subpoena or order, or they may merely seek a declaration concerning the validity of [the] subpoena or order. By first seeking a declaration, [the Senate would give] the party an opportunity to comply before actually [being] ordered to do so by a court." It is solely within the discretion of the Senate whether or not to use such a two-step enforcement process. Regardless of whether the Senate seeks the enforcement of, or a declaratory judgment concerning a subpoena, the court will first review the subpoena's validity. Because of the limited scope of the jurisdictional statute and the Speech or Debate Clause immunity for actions taken as part of congressional investigations, "when the court is petitioned solely to enforce a congressional subpoena, the court's jurisdiction is limited to the matter Congress brings before it, that is whether or not to aid Congress in enforcing the subpoena." Even if the court finds that the subpoena "does not meet applicable legal standards for enforcement," it does not have jurisdiction to enjoin the congressional proceeding. The court can only refuse to issue an order instructing compliance with the subpoena. However, if the court does order compliance with the subpoena and the individual still refuses to comply, he may be tried by the court in summary proceedings for contempt of court, with sanctions being imposed to coerce his compliance. Civil enforcement, however, has limitations. Most notable is that the statute granting jurisdiction to the courts to hear such cases is, by its terms, inapplicable in the case of a subpoena issued to an officer or employee of the federal government acting in their official capacity. While the House of Representatives cannot pursue actions under the Senate's civil enforcement statute discussed above, past precedent suggests that the House may authorize a committee to seek a civil enforcement action to force compliance with a subpoena. The 2008 dispute over the refusal of former White House Counsel Harriet Miers to testify in connection to a House Judiciary Committee investigation into the resignations of nine U.S. Attorneys represented the first congressional attempt to seek civil enforcement of a subpoena in federal court authorized solely by resolution of a single house. Prior to this case, a number of threshold questions, including whether the federal courts would have jurisdiction over such a claim, remained unresolved. However, following the federal district court decision in Committee on the Judiciary v. Miers , it appears that the current statutory basis is sufficient to establish jurisdiction for a civil action of the type contemplated if the representative of the congressional committee is specifically authorized by a house of Congress to act. In 2012, the House again authorized a congressional committee to pursue a civil action in federal court to enforce a subpoena issued to an executive branch official. On June 28, 2012, in addition to holding Attorney General Eric Holder in contempt of Congress for his failure to comply fully with subpoenas issued pursuant to the House Oversight and Government Reform Committee investigation of Operation Fast and Furious, the House also approved a resolution authorizing the committee to initiate a civil lawsuit on behalf of the committee to enforce the outstanding subpoenas. The lawsuit, which seeks a declaratory judgment directing the Attorney General to comply with the committee subpoenas, was filed on August 13, 2012. On September 30, 2013, the court issued its opinion rejecting the Department of Justice's (DOJ's) motion to dismiss based on jurisdictional and justiciability arguments. The court largely adopted the reasoning laid out in Miers , in a detailed discussion that addressed federal court jurisdiction, standing, causes of action, and separation-of-powers concerns. Since that decision, the court has denied motions for summary judgment from both parties and ordered the DOJ to provide the court with a list of documents withheld that describes why each document is privileged and protected from disclosure. The court has yet to reach the merits of the executive privilege question. Following Miers and Holder , it appears that all that is legally required for House committees, the House General Counsel, or a House-retained private counsel to seek civil enforcement of subpoenas or other orders is that authorization be granted by resolution of the full House. Absent such authorization, it appears that the courts will not entertain civil motions of any kind on behalf of Congress or its committees. While some may still argue that a measure passed by both houses and signed by the President conferring jurisdiction is required, it appears that--at least with respect to claims filed in the U.S. District Court for the District of Columbia--if an authorizing resolution by the House can be obtained, there is a likelihood that the court will find no legal impediment to seeking civil enforcement of subpoenas or other committee orders. Although the DOJ appears to have acknowledged that properly authorized procedures for seeking civil enforcement provide the preferred method of enforcing a subpoena directed against an executive official, the executive branch has consistently taken the position that Congress cannot, as a matter of statutory or constitutional law, invoke either its inherent contempt authority or the criminal contempt of Congress procedures against an executive branch official acting on instructions by the President to assert executive privilege in response to a congressional subpoena. Under such circumstances, the Attorney General has previously directed the U.S. Attorney to refrain from pursuing a criminal contempt prosecution under 2 U.S.C. Sections 192, 194. This view is most fully articulated in two opinions by the DOJ's Office of Legal Counsel (OLC) from the mid-1980s, and further evidenced by actions taken by the DOJ in the contempt proceedings against Environmental Protection Agency Administrator Anne Gorsuch Burford, former White House Counsel Harriet Miers, White House Chief of Staff Josh Bolten, and Attorney General Eric Holder. In each case the House approved a contempt citation against the official and forwarded the citation on to the U.S. Attorney, only to see the DOJ decline to bring a prosecution for criminal contempt. As a result, when an executive branch official is invoking executive privilege at the behest of the President, the criminal contempt provision may prove ineffective, forcing Congress to rely on other avenues to enforce subpoenas, including civil enforcement through the federal courts. The 2014 controversy surrounding former Internal Revenue Service (IRS) official Lois Lerner may suggest that the executive branch has broadened its position on the use of criminal contempt against an executive official. In that case, the House held Ms. Lerner in contempt, passing a criminal contempt citation after she refused to provide testimony relating to her role in the allegations that the IRS targeted politically active conservative groups for increased scrutiny in assessing applications for tax exempt status. Appearing before the House Committee on Oversight and Government Reform, Lerner invoked the Fifth Amendment privilege against self-incrimination as the basis for her refusal to testify. The committee rejected her assertion, concluding that she had waived her Fifth Amendment privilege by voluntarily making an opening statement in which she declared her innocence. Although the House approved the contempt citation, the DOJ has remained silent and has taken no action to pursue a criminal case against Lerner. As noted, the DOJ's past refusals to prosecute for contempt of Congress have involved situations in which the executive branch official refused to comply with a subpoena on the grounds that the documents or testimony sought were protected by executive privilege. Unlike these past controversies, the dispute surrounding Ms. Lerner did not involve executive privilege or institutional interests in the confidentiality of executive branch communications. Rather, Lerner's justification for noncompliance with the committee subpoena relates to her personal constitutional privilege against self-incrimination under the Fifth Amendment. As such, the DOJ's exercise of prosecutorial discretion in apparently declining to pursue a criminal contempt of Congress charge against executive branch officials would appear to extend beyond those situations in which the official is asserting executive privilege. The lessons to be gleaned from the Burford, Miers, Holder, and Lerner disputes appear to be twofold. First, Congress faces a number of obstacles in any attempt to enforce a subpoena issued against an executive branch official through the criminal contempt statute. Although the courts have reaffirmed Congress's constitutional authority to issue and enforce subpoenas, efforts to punish an executive branch official for noncompliance with a subpoena through criminal contempt will likely prove unavailing in many, if not most circumstances. Where the President directs or endorses the noncompliance of the official, such as where the official refuses to disclose information pursuant to the President's decision to assert executive privilege, past practice suggests that the DOJ will not pursue a prosecution for criminal contempt. The U.S. Attorney would likely rely on prosecutorial discretion as grounds for not forwarding the contempt citation to the grand jury pursuant to 2 U.S.C. Section 194. In other scenarios, however, where the conduct of the executive branch official giving rise to the contempt citation was not endorsed by the President, for example where an official disregards a congressional subpoena to protect personal rather than institutional interests, the criminal contempt provision may remain an effective avenue for punishing executive officials. Even in these situations, however, the executive branch may choose not to prosecute the official, either because the executive branch views the contempt citation as without merit or to avoid establishing a precedent for Congress's authority to use the criminal contempt statute to punish an executive branch officer. Second, although it appears that Congress may be able to enforce its own subpoenas through a declaratory civil action, relying on this mechanism to enforce a subpoena directed at an executive official may prove an inadequate means of protecting congressional prerogatives due to the time required to achieve a final, enforceable ruling in the case. This shortcoming was apparent in the Miers case, where the committee received a favorable decision from the district court, but was unable to enforce that decision prior to the expiration of the 110 th Congress and the conclusion of the Bush Administration. Given the precedential importance of any civil action to enforce a congressional subpoena, the resulting litigation would likely include a protracted appeals process. The Miers litigation, which never reached a decision on the merits by the D.C. Circuit, was dismissed at the request of the parties after approximately 19 months. Although the committee gained access to much of the information the Bush Administration had refused to disclose, the change in administrations and the passage of time could be said to have diminished the committee's ability to utilize the provided information to engage in effective oversight. In light of these practical realties, in many situations Congress likely will not be able to rely on the executive branch to effectively enforce subpoenas directed at executive branch officials, nor will reliance on the civil enforcement of subpoenas through the judicial branch always result in a prompt resolution of the dispute. Although subject to practical limitations, Congress retains the ability to exercise its own constitutionally based authorities to enforce a subpoena through inherent contempt.

Congress's contempt power is the means by which Congress responds to certain acts that in its view obstruct the legislative process. Contempt may be used either to coerce compliance, punish the contemnor, and/or to remove the obstruction. Although arguably any action that directly obstructs the effort of Congress to exercise its constitutional powers may constitute a contempt, in recent times the contempt power has most often been employed in response to noncompliance with a duly issued congressional subpoena--whether in the form of a refusal to appear before a committee for purposes of providing testimony or a refusal to produce requested documents. Congress has three formal methods by which it can combat noncompliance with a duly issued subpoena. Each of these methods invokes the authority of a separate branch of government. First, the long dormant inherent contempt power permits Congress to rely on its own constitutional authority to detain and imprison a contemnor until the individual complies with congressional demands. Second, the criminal contempt statute permits Congress to certify a contempt citation to the executive branch for the criminal prosecution of the contemnor. Finally, Congress may rely on the judicial branch to enforce a congressional subpoena. Under this procedure, Congress may seek a civil judgment from a federal court declaring that the individual in question is legally obligated to comply with the congressional subpoena. A number of obstacles face Congress in any attempt to enforce a subpoena issued against an executive branch official. Although the courts have reaffirmed Congress's constitutional authority to issue and enforce subpoenas, efforts to punish an executive branch official for noncompliance with a subpoena through criminal contempt will likely prove unavailing in many, if not most, circumstances. Where the official refuses to disclose information pursuant to the President's decision that such information is protected under executive privilege, past practice suggests that the Department of Justice (DOJ) will not pursue a prosecution for criminal contempt. In addition, although it appears that Congress may be able to enforce its subpoenas through a declaratory civil action, relying on this mechanism to enforce a subpoena directed at an executive official may prove an inadequate means of protecting congressional prerogatives due to the time required to achieve a final, enforceable ruling in the case. Although subject to practical limitations, Congress retains the ability to exercise its own constitutionally based authorities to enforce a subpoena through inherent contempt. This report examines the source of Congress's contempt power, analyzes the procedures associated with inherent contempt, criminal contempt, and the civil enforcement of subpoenas, and discusses the obstacles that face Congress in enforcing a contempt action against an executive branch official. A more fully developed and detailed version of this report, complete with sources and references, can be found at CRS Report RL34097, Congress's Contempt Power and the Enforcement of Congressional Subpoenas: Law, History, Practice, and Procedure, by [author name scrubbed] and [author name scrubbed].

Hypoxia refers to a depressed concentration of dissolved oxygen in water. While definitions vary somewhat by region, it is generally agreed that hypoxia in a marine environment occurs seasonally when dissolved oxygen levels fall below 2-3 milligrams per liter. Normal dissolved oxygen concentrations in nearshore marine waters range between 5 and 8 milligrams per liter, and many fish species begin having respiratory difficulties at concentrations below 5 milligrams per liter. In extremely low oxygen environments, less tolerant marine animals cannot survive and either leave the area or die. Mortality is especially likely for sedentary species. In addition, spawning areas and other essential habitat can be destroyed by the lack of oxygen. If these conditions persist, a so-called "dead zone" may develop in which little marine life exists. The recovery of marine ecosystems following a hypoxic event has not been extensively studied. Decreased concentrations of dissolved oxygen result in part from natural eutrophication when nutrients (e.g., nitrogen and phosphorus) and sunlight stimulate algal growth (e.g., algae, seaweed, and phytoplankton), increasing the amount of organic matter in an aquatic ecosystem over decades and centuries. As organisms die and sink to the bottom, they are consumed (decomposed) by oxygen-dependent bacteria, depleting the water of oxygen. When this eutrophication is extensive and persistent, bottom waters may become hypoxic, or even anoxic (no dissolved oxygen), while surface waters can be completely normal and full of life. Hypoxia is more likely to occur in coastal waters where the water column is stratified (i.e., layered) because of differences in temperature or salinity or both. Marine dead zones become most noticeable when and where natural eutrophication has been accelerated by human-influenced increases in nutrient loads. Hypoxia often develops as a result of upwelled ocean waters, particularly along the western coast of the Americas. In many instances, cool, nutrient-rich, deep marine waters rise along the coastal margin and support massive algal blooms that lead to hypoxia. In other instances, upwelled deep water is simply devoid of oxygen. Eutrophication as a result of human activities usually results from non-point sources of nutrients (e.g., runoff from lawns and various agricultural activities including fertilizer use and livestock feedlots), point-source discharge from sewage plants, and emissions from vehicles, power plants, and other industrial sources. Hypoxic zones frequently occur in coastal areas where rivers enter the ocean (e.g., estuaries). Rivers deliver fresh waters that are rich in nutrients to the saltier estuaries and coastal oceans. The fresh water is less dense than the salt water and typically flows across the top of the sea water. The fresh surface water effectively caps the more dense, saline bottom waters, retarding mixing, creating a two-layer system, and promoting hypoxia development in the lower, more saline waters. In the northern Gulf of Mexico, the greatest algal growth in surface waters occurs about a month after maximum river discharge, with hypoxic bottom water developing a month later. Hypoxia is more likely to occur in estuaries with high nutrient loading and low flushing (i.e., low freshwater turnover). Human activities that increase nutrient loading can increase the intensity, spatial extent, and duration of hypoxic events. Storms and tides may mix the hypoxic bottom water and the aerated surface water, dissipating the hypoxia. Although the extent of effects of hypoxic events on U.S. coastal ecosystems is still uncertain, the phenomenon is of increasing concern in coastal areas. Several federal agencies are involved in analyzing the problem, including the U.S. Geological Survey (USGS), the National Oceanic and Atmospheric Administration (NOAA), and the U.S. Environmental Protection Agency (EPA). Legislation was enacted by the 105 th Congress to provide additional authority and funding for research and monitoring to address these concerns. This authority was extended by the 108 th Congress. Hypoxic episodes have been recorded in all parts of the world, notably in partially enclosed seas and basins where vertical mixing is minimal, such as the Gulf of Mexico, Chesapeake Bay, the New York Bight, the Baltic Sea, and the Adriatic Sea. In March 2004, the U.N. Environment Program's (UNEP's) Global Environment Outlook (GEO) Year Book 2003 reported 146 dead zones where marine life could not be supported due to depleted oxygen levels. In 2006, UNEP's Global Programme of Action for the Protection of the Marine Environment from Land-based Activities reported that the frequency and intensity of coastal dead zones is rapidly increasing and could reach 200 sites when a full list of newly identified sites is released in early 2007. Hypoxia has become more frequent and widespread in shallow coastal and estuarine areas. In addition, permanently hypoxic water masses (i.e., oxygen minimum zones) occur in the open ocean, affecting large seafloor surface areas along the continental margins of the eastern Pacific, Indian, and western Atlantic Oceans. About 21% to 43% of the area of the United States' estuaries have experienced a hypoxic event; more than half of the affected area is in the Mississippi/Atchafalaya River plume. In the Mid-Atlantic region, 13 of 22 estuaries have experienced hypoxic/anoxic events. Of these, the Long Island Sound, Chesapeake Bay, Choptank River, and the New York Bight experience the most serious annual episodes. In the South Atlantic region, hypoxic/anoxic episodes are generally brief, with nearly two-thirds of this region's 21 estuaries experiencing some hypoxia/anoxia. The Gulf of Mexico region experiences the highest rate of hypoxic/anoxic events, with almost 85% of this region's 38 estuaries experiencing episodes of hypoxia (including the Mississippi/Atchafalaya River plume). The North Atlantic region is not as prone to hypoxic/anoxic events due to the generally low nutrient input (the result of lower population density) and high tidal flushing. However, areas adjacent to high population density (e.g., Cape Cod Bay and Massachusetts Bay) do experience oxygen depletion. In the Pacific region, hypoxia also occurs near population centers (e.g., San Diego Bay, Newport Bay, Alamitos Bay) or in areas of limited circulation, even where water temperatures are cold (e.g., Hood Canal, Whidbey Basin/Skagit Bay). The hypoxic zone in the northern Gulf of Mexico is the largest observed in the estuarine and coastal regions of the western hemisphere. First recognized in the early 1970s, it is the largest and most hypoxic area in the United States. The area of hypoxia extends westward from the mouth of the Mississippi River to the upper Texas coast. The seasonal shape and extent of the dead zone are mostly a function of the Mississippi/Atchafalaya River plume, the combined outflow from these two major rivers, and the biological processes it influences. The most reliable predictor of the size of the hypoxic zone is the nitrate-nitrogen load in the two months before the mid-summer mapping cruise. This hypoxic zone generally occurs from May to September, but varies from year to year. In summer 1993, following massive Mississippi River flooding, the dead zone covered more than 18,000 square kilometers (an area as large as the state of New Jersey); it reached its largest size in summer 2002--22,000 square kilometers (an area as large as the state of Massachusetts). Variation in size can be substantial between years--after reaching a maximum size of 20,000 square kilometers in 1999, the dead zone covered a much smaller 4,400 square kilometers in 2000. Although initially predicted to be the largest in size since measurements began, the hypoxic zone in 2007 covered about 20,500 square kilometers. However, a second smaller hypoxic zone of about 4,500 square kilometers also developed off Texas in 2007. This second dead zone was located near Galveston south to Matagorda Bay, and formed after runoff from heavy rains in the Brazos River drainage discharged into the Gulf. Low velocity winds during the summer result in calm seas that maintain the stratified barrier between surface and bottom water layers. Only during weather disturbances, such as frontal passages, tropical storms, and hurricanes, does vertical mixing of these stratified layers occur. Increased winds and frontal storms in autumn vertically mix the water column, dissipating the hypoxia. In the summer of 1998, this dead zone extended from very near shore (about 10-15 feet water depth) to deeper waters than are normally hypoxic (as much as 160 feet deep off the Mississippi River delta). Nutrient enrichment is the primary cause of eutrophication, of some algal blooms, and of hypoxia, and is believed to be a major factor in areas such as the northern Gulf of Mexico. The Mississippi watershed drains 41% of the land area of the contiguous 48 states, including most of the farmbelt. Studies of the Mississippi and Atchafalaya Rivers indicate that dissolved nitrogen levels have tripled and phosphorus levels have doubled since 1960, fueling algal growth and the resultant dead zone. Research suggests that fertilizer leaching and runoff from upriver agricultural sources may be the main sources of nutrients. For example, USGS states that 56% of the Mississippi River's nutrient loading results from fertilizer runoff, with an additional 25% of the Mississippi River nitrogen coming from animal manure (municipal and solid wastes account for 6%, atmospheric deposition for 4%, and unknown sources for 9%). Analysis of cores of sediments underlying the hypoxic area reveals historic information on the Mississippi River watershed, indicating that surface water productivity has increased and bottom water oxygen stress has worsened since the early 1900s, with the most dramatic changes occurring since the 1950s--a change strongly correlated with increased use of commercial fertilizers in the watershed. Hypoxia in the northern Gulf of Mexico was not an obvious or widespread phenomenon prior to the early 1970s, but became so since then with the advent of heavy use of artificial fertilizers and changed agricultural practices. Several studies show a direct relationship between river-born nutrients, the high rates of phytoplankton production, and subsequent Gulf of Mexico hypoxia. However, questions remain as to how much of the river's nitrogen might come from natural soil mineralization, what effects floods have on nutrient transport, and how much nitrogen may be contributed by coastal land loss, estimated at 25 square miles per year. Although studies have found that more than 70% of the total nitrogen transported to the Gulf of Mexico by the Mississippi River originates above the confluence of the Ohio and Mississippi Rivers, focusing on nitrogen runoff per unit area identifies other areas where more concentrated nutrient runoff occurs. Although the lower Mississippi basin (which drains parts of Tennessee, Arkansas, Missouri, Mississippi, and Louisiana) is responsible for only 23% of the nitrogen delivered to the Gulf, some scientists believe that nitrogen removal and/or runoff prevention strategies should focus on this area because of its much greater relative nitrogen contribution and likely more economically efficient nitrogen removal. Researchers estimate that the benefits of nutrient controls in this lower basin could be twice as effective as implementing them in upstream basins. Others dispute that approach, believing that nitrogen removal is much more effective in small streams (i.e., headwaters in drainages) than in large rivers. They contend that, while an area with higher yield per area may seem like a suitable place to focus management attention, focus should be directed to upstream areas where the total yield (regardless of the yield per area) is greater. Workshops and conferences have identified strategies for implementing nutrient controls in the lower Mississippi basin. Many farming interests maintain that evidence has not proven that agricultural practices are the primary contributors to the development of the Gulf of Mexico dead zone. Some farmers dispute that they contribute substantially to creating a dead zone that is as much as 1,000 miles away. They argue that their goal is to keep as much as possible of the applied nutrients on their land, since any nutrients that wash away represent wasted money. On the other hand, it is estimated that as much as half of the applied nutrients are lost to surface or ground water and to the air, resulting in approximately $750 million in excess nitrogen (calculated as fertilizer cost) entering the Mississippi River each year. The Gulf of Mexico supports important, easily accessible commercial and recreational fisheries, bringing in almost $2.9 billion annually in retail sales to Louisiana and supporting almost 50,000 jobs. These highly productive fisheries are the direct result of the input of nutrients from the Mississippi River watershed. Several studies have linked fishery effects, including declines in shrimp yields, with hypoxic episodes and areas in the Gulf. Evidence suggests that the dead zone forces fish and shrimp further offshore as well as into shallow nearshore areas, and reduces the area of essential habitat. Hypoxia increases stress on aquatic ecosystems and may decrease biological diversity in areas experiencing repeated and severe hypoxia. Crowding of marine life into restricted habitat also may lead to indirect consequences through altered competition and predation interactions. In addition, hypoxia may delay or impede the offshore migration of older, larger shrimp, preventing shrimp trawlers from selectively targeting larger shrimp for harvest. While it is unclear what specific effects the dead zone has on Gulf fisheries, the occurrence of this dead zone may force fishing vessels to change their normal fishing patterns, possibly expending more time and fuel to harvest their catch. One study has concluded that any increase in fishing expenses could drive marginal operators out of business. Other potential impacts on Louisiana fisheries include concentration of fishing effort in other areas, resulting in localized overfishing; damage to essential habitat, and possible decreased future production; shellfish mortality, if hypoxic conditions impinge on barrier island beaches and coastal bay waters; localized mortality of finfish and shellfish in shoreline areas; and decreased growth due to reduced food resources in the sediments and water column. The National Oceanic and Atmospheric Administration, Center for Sponsored Coastal Ocean Research, initiated a series of research projects in the northern Gulf of Mexico in 2003 to better understand the effects of hypoxia on fishery resources. Because the relationship between hypoxic dead zones and populations of commercially and recreationally important living resources is the single most significant scientific barrier to informed management of the hypoxia problem nationally, NOAA's Center for Sponsored Coastal Ocean Research convened a symposium and workshop in March 2007. This meeting focused on the effectiveness of existing approaches for evaluating the effects of hypoxia on ecologically, commercially, and recreationally important fish and shellfish populations in three coastal systems noted for seasonally recurring hypoxic zones--Chesapeake Bay, the Gulf of Mexico, and Lake Erie. Hypoxic conditions have been recognized in Chesapeake Bay for many years. In 2003, Virginia Institute of Marine Science (VIMS) scientists found a 250-square-mile area of hypoxic water in upper Chesapeake Bay at depths below about 20 feet, from north of Annapolis nearly to the mouth of the Potomac River. The low oxygen levels were attributed to large nitrogen and phosphorus nutrient inputs, likely carried into the bay by runoff from above-average winter snowfall and spring rains. This runoff was able to pick up nutrients that had accumulated in surrounding soils during four consecutive years of dry weather. These nutrients stimulate large summertime algal blooms in the bay, reducing dissolved oxygen in bay waters when these organisms sink to the bottom and decompose. In 2006, the total hypoxic area in the bay was smaller than in previous years, possibly because spring rainfall was close to the lowest on record, resulting in less runoff and reduced nutrient input to the bay. Although permanently hypoxic water masses (oxygen minimum zones) affect large seafloor surface areas along the continental margin of the eastern Pacific Ocean, no dead zone events had been reported in the nearshore waters off the Oregon coast prior to 2002. Unlike the dead zones in estuarine systems that are caused, in large part, by excessive nutrient runoff from land, the Oregon dead zone forms along the open coast. Coastal winds drive ocean currents that upwell nutrient-rich, but oxygen-poor, waters from the deep sea onto the shallow reaches of the continental shelf. This upwelling of nutrients fuels phytoplankton blooms that eventually sink and decompose to further reduce oxygen levels in the already low-oxygen waters along the seafloor. Hypoxic zones along the Oregon coast form seasonally and can begin in late spring/early summer in response to the onset of upwelling-favorable winds from the north. This hypoxia can persist through the summer and ultimately recedes during the fall when winds again shift direction and promote ocean currents that flush low-oxygen water off the continental shelf. In 2006, the Oregon coastal dead zone was significantly larger (more than 3,000 square kilometers), thicker, longer lasting, and lower in oxygen concentration than in previous years, extending along the ocean floor from Cape Perpetua (Florence) in the south to Cascade Head (Lincoln City) in the north, as close to shore as the 50-foot depth. Underwater surveys of the 2006 event revealed complete disappearance of fish from important habitats in addition to near-complete mortalities of benthic invertebrates that are important in coastal food-webs. The appearance and growth of this dead zone is attributed to fundamental, but not well understood, changes in ocean conditions off the Oregon coast. The severity of the 2006 dead zone appears to reflect (1) changes in ocean and atmosphere conditions that include the strongest declines in offshore source-water oxygen content on record, (2) an exceptional shift in coastal wind patterns that has greatly enhanced upwelling currents, and (3) the persistence of low-oxygen water and phytoplankton blooms along the coast. The extent of the developing hypoxic event in 2007 has not been determined. An analogous dead zone along the open coast of Washington State may also be developing. While controlling upwelling-caused hypoxic zones is unlikely, increasing the ability to predict and understand the severity and consequences of future hypoxic events will be necessary for managing and ameliorating the social and economic effects of ecosystem changes along the Oregon coast and beyond. Since a temporary, yet severe, hypoxic event could result in significant mortality or injury to marine mammals, fish, and other aquatic species, many have deemed better understanding and consistent monitoring of hypoxic phenomena necessary. NOAA initiated the Nutrient Enhanced Coastal Ocean Productivity (NECOP) program in 1989 to study the effects of nutrient discharges on U.S. coastal waters. This study found a clear link between nutrient input, enhanced primary production (i.e., algal and plant growth), and hypoxic events in the northern Gulf of Mexico. In response to a January 1995 petition from the Sierra Club Legal Defense Fund (currently known as Earthjustice Legal Defense Fund) on behalf of 18 environmental, social justice, and fishermen's organizations, the Gulf of Mexico Program held a conference in December 1995 to outline the issue and identify potential actions. Following that conference, Robert Perciasepe, Assistant EPA Administrator for Water, convened an interagency group of senior Administration officials (the "principals group") to discuss potential policy actions and related science needs. Subsequently, this "principals group" created a Mississippi River/Gulf of Mexico Watershed Nutrient Task Force. Additionally, the White House Office of Science and Technology Policy's Committee on Environment and Natural Resources (CENR) conducted a Hypoxia Science Assessment at the request of EPA. The CENR assessment was peer-reviewed, made available for public comment, and submitted to the task force to assist in developing policy recommendations and a strategy for addressing hypoxia in the northern Gulf of Mexico. In response to an integrated scientific assessment of hypoxia in the northern Gulf of Mexico by the multi-agency Watershed Nutrient Task Force, a Plan of Action for addressing hypoxia was released in January 2001. This plan's environmental objective is to reduce the five-year running average of the dead zone's area to 5,000 square kilometers or less by the year 2015. Estimates based on water-quality measurements and streamflow records indicate that a 40% reduction in total nitrogen flux to the Gulf is necessary to return to average loads comparable to those during 1955-1970. Model simulations suggest that, short of this 40% reduction, nutrient load reductions of about 20%-30% would result in a 15%-50% increase in dissolved oxygen concentrations in bottom waters. Strategies selected focus on encouraging voluntary, practical, and cost-effective actions; using existing programs, including existing state and federal regulatory mechanisms; and following adaptive management. A reassessment of progress on implementing this action plan was initiated in 2005. A key consideration is the level and duration of the necessary reduction in excess nutrients from watersheds. Many agricultural lands have been saturated with nutrients for many years, and it may take a long time to "cycle out" excess nitrogen and phosphorus, even if application rates are reduced. While some believe this problem may have no fast solutions and any management regime considered will need to recognize that progress or improvement may not be apparent for years or even decades, others suggest that improved agricultural practices in efficient application of chemical fertilizers and prevention of soil erosion could yield immediate and measurable benefits. One model suggests that a 12% to 14% reduction in the use of fertilizer on croplands in the Mississippi River basin would reduce the net anthropogenic nitrogen inputs by about 30%, without any loss in crop production. Various policy options for modifying agriculture practices continue to be discussed. Because nonpoint sources are major contributors to the problem at the mouth of the Mississippi River system, many believe the Clean Water Act is the appropriate legal framework for addressing future nutrient inputs. Under SS319 of the Clean Water Act, Louisiana and other states have initiated nonpoint-source control programs. These programs seek to combine local, state, and federal agency resources to address pollution from nonpoint sources within each state. To effectively address concerns, however, nonpoint-source programs would need to be encouraged, funded, and implemented throughout the Mississippi River watershed. Under SS303 of the Clean Water Act, states must identify water-quality-limited segments of their waters that are not meeting standards, and then establish total maximum daily loads (TMDLs) for each listed water and each pollutant (e.g., nutrients) that is not meeting current water quality standards. In addition, agricultural research and educational outreach/assistance to farmers might complement regulatory efforts. Congress took note of the hypoxia problem in 1997 when the conference report on FY1998 Department of the Interior appropriations ( H.Rept. 105-337 ) directed the USGS to give priority attention to hypoxia in its FY1999 budget. Near the end of the 105 th Congress, provisions of the Harmful Algal Bloom and Hypoxia Research and Control Act of 1998 were incorporated into the Coast Guard Authorization Act of 1998. This measure was signed into law as P.L. 105-383 on November 13, 1998; Title VI authorized appropriations through NOAA to conduct research, monitoring, education, and management activities for the prevention, reduction, and control of hypoxia, harmful algal blooms, Pfiesteria , and other aquatic toxins. In 2004, Title I of P.L. 108-456 , the Harmful Algal Bloom and Hypoxia Amendments Act of 2004, expanded this authority and reauthorized appropriations through FY2008. Legislation has been introduced in the 110 th Congress to reauthorize and amend the Harmful Algal Bloom and Hypoxia Research and Control Act. Hypoxia research is regularly funded through appropriations to the National Ocean Service--part of the National Oceanic and Atmospheric Administration in the Department of Commerce--in their Extramural Research account under National Centers for Coastal Ocean Science . For FY2008, NOAA has requested $8.9 million for extramural research grants related to harmful algal bloom and hypoxia, including forecasting. In the last few years, the U.S. Department of Agriculture's Cooperative State Research, Education, and Extension Service has provided a special research grant of around $220,000 annually to Iowa State University's Leopold Center for Sustainable Agriculture for a project to define and implement new methods and practices in farming that reduce impacts on water quality and the hypoxia problem in the Gulf of Mexico. In the last few years, the Environ-mental Protection Agency's Environmental Programs and Management account has provided a specific authorization of around $125,000 annually for the Missouri Department of Agriculture's Hypoxia Education and Stewardship Project. This effort seeks to educate Missouri producers about hypoxia and encourage use of practices that will reduce the amount of nitrogen lost through leaching and/or evaporation. The EPA has also funded research on Gulf of Mexico hypoxia through its Gulf Breeze Laboratory.

An adequate level of dissolved oxygen is necessary to support most forms of aquatic life. While very low levels of dissolved oxygen (hypoxia) can be natural, especially in deep ocean basins and fjords, hypoxia in coastal waters is mostly the result of human activities that have modified landscapes or increased nutrients entering these waters. Hypoxic areas are more widespread during the summer, when algal blooms stimulated by spring runoff decompose to diminish oxygen. Such hypoxic areas may drive out or kill animal life, and usually dissipate by winter. In many places where hypoxia has occurred previously, it is now more severe and longer lasting; in others where hypoxia did not exist historically, it now does, and these areas are becoming more prevalent. The largest hypoxic area affecting the United States is in the northern Gulf of Mexico near the mouth of the Mississippi River, but there are others as well. Most U.S. coastal estuaries and many developed nearshore areas suffer from varying degrees of hypoxia, causing various environmental damages. Research has been conducted to better identify the human activities that affect the intensity and duration of, as well as the area affected by, hypoxic events, and to begin formulating control strategies. Near the end of the 105th Congress, the Harmful Algal Bloom and Hypoxia Research and Control Act of 1998 was signed into law as Title VI of P.L. 105-383. Provisions of this act authorize appropriations through NOAA for research, monitoring, education, and management activities to prevent, reduce, and control hypoxia. Under this legislation, an integrated Gulf of Mexico hypoxia assessment was completed in the late 1990s. In 2004, Title I of P.L. 108-456, the Harmful Algal Bloom and Hypoxia Amendments Act of 2004, expanded this authority and reauthorized appropriations through FY2008. Legislation has been introduced in the 110th Congress to reauthorize and amend the Harmful Algal Bloom and Hypoxia Research and Control Act. As knowledge and understanding have increased concerning the possible impacts of hypoxia, congressional interest in monitoring and addressing the problem has grown. The issue of hypoxia is seen as a search for (1) increased scientific knowledge and understanding of the phenomenon, as well as (2) cost-effective actions that might diminish the size of hypoxic areas by changing practices that promote their growth and development. This report presents an overview of the causes of hypoxia, the U.S. areas of most concern, federal legislation, and relevant federal research programs. This report will be updated as circumstances warrant.

The child tax credit was created in 1997 by the Taxpayer Relief Act of 1997 ( P.L. 105-34 ) to help ease the financial burden that families incur when they have children. Over the past 20 years legislative changes have significantly changed the credit, transforming it from a generally nonrefundable credit available only to the middle and upper-middle class, to a partially refundable credit that more low-income families are eligible to claim. This report examines the legislative history of the credit, describing how the credit has changed over the past two decades as a result of different laws. The report includes a description of the recent legislative changes made to the credit by P.L. 115-97 . The child tax credit was initially structured in the Taxpayer Relief Act of 1997 ( P.L. 105-34 ) as a $500-per-child nonrefundable credit to provide tax relief to middle- and upper-middle-income families. Since 1997, various laws have modified key parameters of the credit, expanding the availability of the benefit to more low-income families while also increasing the value of the tax credit. The first significant change to the child tax credit occurred with the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16 ). EGTRRA increased the amount of the credit over time to $1,000 per child and made it partially refundable under the earned income formula. The refundable portion of the credit--the amount that exceeds income tax liability--is often referred to as the additional child tax credit or ACTC. Subsequent legislation enacted in 2003 and 2004 accelerated the implementation of the changes made under EGTRRA. In 2008 and 2009, Congress passed legislation--the Emergency Economic Stabilization Act of 2008 (EESA; P.L. 110-343 ) and the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 )--that further expanded the availability and amount of the credit to taxpayers whose income was too low to either qualify for the credit or be eligible for the full credit. ARRA lowered the refundability threshold to its current level of $3,000 for 2009 through 2010. The ARRA provisions were subsequently extended several times and made permanent by the Protecting Americans from Tax Hikes (PATH) Act of 2015 (Division Q of P.L. 114-113 ). At the end of 2017, Congress enacted P.L. 115-97 which, in addition to making numerous changes to the tax code, temporarily changed the child tax credit. Specifically, the law increased the credit for many (though not all) taxpayers by doubling the maximum amount of the credit (and increasing the maximum amount of the ACTC to $1,400), increasing the income at which the credit begins to phase out, and reducing the refundability threshold as illustrated in Table 1 . In addition, this law temporarily modified the identification (ID) number requirement of the credit, requiring taxpayers to provide the Social Security number (SSN) for every child for whom they claimed the credit. Below is a summary of major legislative changes made to the child tax credit between 1997 and 2017. These descriptions are preceded by an overview of policy debates that occurred immediately before enactment of the credit. The first child tax credit was enacted in 1997 as part of the Taxpayer Relief Act of 1997 ( P.L. 105-34 ), but it was conceived years earlier and included in several different bills before it ultimately became law. In 1991, the bipartisan National Commission on Children, which was established to provide solutions to a variety of problems facing children, recommended in its final report to the President the creation of a $1,000 refundable child tax credit for all children through age 18. The commission's proposed credit amount was indexed for inflation. The report cited slow wage growth, the increasing costs of living, and a rising tax burden for the average family as key factors leading to increased financial burdens on families with children. The report's authors acknowledged that there were provisions in the tax code meant to address the increased financial burden to families that arose from having children, specifically the exemption for dependents. The dependent exemption was intended to provide economic relief to families with children by reducing taxable income by a fixed amount per dependent, and hence reducing tax liability. However, the amount of the exemption was fixed in nominal terms (i.e., not adjusted for inflation) and the commission's report highlighted the fact that its real value had declined considerably since it was established in 1948. The commission argued against simply increasing the amount of the dependent exemption, noting that such a policy would not provide adequate benefit to lower- and middle-income families. Specifically, the commission noted that the dependent exemption, similar to a tax deduction, provided greater monetary benefit to taxpayers with greater taxable income since its value (in terms of tax savings) was proportional to a taxpayer's highest marginal tax bracket. And since the dependent exemption could not lower the tax liability of taxpayers who, due to low income, owed no federal income tax, it was unavailable to many families with children who the commission believed most needed economic assistance. Three years later, in 1994, a child tax credit was included in legislation meant to enact key principles of the Contract with America, a list of policy proposals released by the Republican Party before the 1994 midterm elections. In the 104 th Congress, both the American Dream Restoration Act ( H.R. 6 ) and later the Tax Fairness and Deficit Reduction Act of 1995 ( H.R. 1215 ), if they had been enacted, would have provided a $500-per-child nonrefundable tax credit for children under 18 years. The credit would have begun to phase out for families with AGI above $200,000 (regardless of filing status). In response to the legislation that had been drafted in Congress, President Clinton proposed his own child tax credit during the 104 th Congress in his Middle Class Bill of Rights Tax Relief Act of 1995. Under this proposal, the child tax credit was a $300-per-child nonrefundable tax credit for tax years 1996 through 1998, increasing to $500 per child after 1998, with income phaseouts beginning at $60,000. The credit amounts were indexed for inflation. An eligible child was defined as being under 13 years of age. President Clinton's proposal was estimated by the Department of the Treasury to cost $35.6 billion over five years, while the American Dream Restoration Act was estimated to cost $107 billion over the same time period. After they did not reach an agreement in 1995, Congress and President Clinton revisited the topic of a child tax credit in 1997. The House, Senate, and Clinton Administration all proposed a $500 nonrefundable tax credit. A key distinction among the proposals centered on the interaction of the child tax credit with the EITC, which would have an impact on the availability of the child tax credit to lower-income taxpayers. Both the Senate and House legislation proposed applying the nonrefundable child tax credit after the EITC had already reduced tax liability. President Clinton proposed the application of the child tax credit before the application of the EITC. For many low- and moderate-income taxpayers, claiming the EITC before the nonrefundable child tax credit reduced or eliminated their child tax credit. By contrast, claiming the nonrefundable child credit before the EITC allowed the taxpayer to claim the full amount of the child tax credit they were eligible for and did not change the value of their EITC. For example, assume that in 1997 a two-parent, two-child family has $23,000 of income. This family would have an $825 tax liability before the application of credits. They would also be eligible for $1,325 in the EITC and, assuming the child credit was $500 per child, $1,000 of the child tax credit. If the EITC was claimed before the child tax credit, this family's tax liability would be reduced to zero and they would receive the remainder of the EITC as a $500 refund. Since they had no tax liability, they could not claim the $1,000 of the nonrefundable child tax credit. If, on the other hand, they claimed the child tax credit first, they could claim $825 of the nonrefundable child tax credit, reducing their tax liability to zero and then claim the full $1,325 of EITC as a refund. The child tax credit proposals differed in other ways, notably the interaction of the child tax credit with the child and dependent care credit, the age of a qualifying child, and the income phase-out levels and phase-out rates. Given that the child tax credit was part of a broader tax bill that had to meet budget rules, many of the specific details of the provision were likely agreed upon after evaluating their budgetary impact. What emerged from the conference negotiations that year was the Taxpayer Relief Act of 1997 ( P.L. 105-34 ), which established a child tax credit. The credit was structured as a $500 nonrefundable tax credit ($400 in 1998) for most families with qualifying children under 17. The credit phased out at a rate of $50 for every $1,000 by which a taxpayer's modified AGI exceeded thresholds based on filing status, namely $110,000 for married taxpayers filing jointly, $75,000 for taxpayers filing as head of household, and $55,000 for married taxpayers filing separately. The credit was refundable for taxpayers with three or more qualifying children and was calculated as the excess of a taxpayer's payroll taxes over their EITC (the alternative formula). Neither the credit amount nor the phaseout thresholds were indexed for inflation. The refundable portion of the credit was reduced by the amount of the taxpayer's alternative minimum tax (AMT). In addition, the total amount by which personal nonrefundable credits (including the child tax credit) could reduce an individual's regular tax liability was limited. The Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 ( P.L. 105-277 ), which was enacted shortly after the enactment of the Taxpayer Relief Act of 1997, repealed the provision that reduced the refundable portion of the child tax credit by the AMT for tax year 1998. In addition, this act allowed personal nonrefundable credits (including the child tax credit) to fully offset a taxpayer's regular income tax liability in 1998. The Ticket to Work and Work Incentives Improvement Act of 1999 ( P.L. 106-170 ) extended the provision in P.L. 105-277 which allowed the nonrefundable personal credit to fully offset regular tax liability for one additional year, through the end of 1999. In addition, for tax years 2000 and 2001, the act included a provision which allowed taxpayers to use their personal nonrefundable credits (including the child tax credit) to not only offset their regular tax liability in full, but also their AMT. Finally, the act also extended for tax years 1999 through 2001 the prior-law repeal of the provision that reduced the refundable portion of the child tax credit by the AMT. The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16 ) made four significant changes to the child tax credit. First, EGTRRA increased the maximum amount of the credit per child in scheduled increments until it reached $1,000 per child in 2010. Second, EGTRRA made the credit refundable for families irrespective of size using the earned income formula. For tax years 2001 through 2004, the earned income formula set the amount of the refundable portion of the credit equal to 10% of a taxpayer's earned income in excess of $10,000, up to the maximum amount of the credit for that tax year. The refundability rate was scheduled to increase to 15% for tax years 2005 through 2010. The $10,000 threshold was indexed for inflation beginning in 2002. Third, EGTRRA allowed the child tax credit to offset AMT tax liability for tax years 2002 through 2010. Fourth, the law temporarily repealed the prior law provision that reduced the refundable portion of the child tax credit by the amount of the AMT. All the EGTRRA provisions were scheduled to expire at the end of 2010. The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA; P.L. 108-27 ) temporarily accelerated the scheduled increase in the maximum credit amount. Specifically, while EGTRRA increased the maximum credit amount to $600 per child for 2003 and 2004, JGTRRA increased this amount to $1,000 per child for those two years. In the summer of 2003, the $400 increase in the credit for 2003 was paid in advance from the Department of the Treasury to many families who qualified for the child tax credit. These direct payments were distributed based on information contained on taxpayers' 2002 income tax returns. The JGTRRA provisions were scheduled to expire after 2004, and the child tax credit would have reverted to its scheduled level under EGTRRA--$700 per child in 2005. In September 2004, Congress passed the Working Families Tax Relief Act of 2004 (WFTRA; P.L. 108-311 ), which further accelerated the implementation of key provisions of EGTRRA. This act extended the maximum amount of the credit established under JGTRRA, $1,000 per child, through 2009. For 2010, the EGTRRA provisions would apply and the maximum amount of the credit would remain $1,000 per child. In addition, WFTRA increased the refundability rate to 15% for 2004. Under EGTRRA, the refundability rate would remain at 15% from 2005 through 2010. WFTRA also contained a provision that allowed combat pay to be included as part of earned income for purposes of computing refundability of the child tax credit. As more soldiers began to see combat due to the wars in Iraq and Afghanistan, they started receiving combat pay. Income earned by members of the armed services in a combat zone is generally excluded from taxation. This exclusion benefits taxpayers who have positive tax liability and reduces the taxes they owe. However, for some lower-income members of the Armed Forces, the exclusion resulted in earnings being too low to qualify for the refundable portion of the child tax credit. The inclusion of combat pay as earned income for purposes of calculating the refundable child tax credit under WFTRA meant that the earnings of some military families would increase above the refundability threshold, ultimately resulting in larger child tax credit refunds. This change was for 2004 through 2010, and was scheduled to expire, along with other provisions of EGTRRA, at the end of 2010. In October 2008, Congress passed the Emergency Economic Stabilization Act of 2009 (EESA; P.L. 110-343 ) in response to the financial and housing crisis. The law included a provision to lower the refundability threshold for the child tax credit for 2008 from $12,050 to $8,500. In the absence of any additional congressional action, the refundability threshold was scheduled to increase to $12,550 in 2009. In early 2009, Congress began to debate different legislative proposals for economic stimulus. Part of that debate concerned changing the refundability threshold of the child tax credit. The House proposed reducing the refundability threshold to zero for 2009 and 2010, while the Senate proposed lowering the refundability threshold to $8,100 over the same time period. The House's proposed changes to the child tax credit were estimated to cost $18.3 billion over 10 years, in comparison to $7.2 billion for the Senate proposal. The provision took its final shape during the meetings between the Senate and the House conferees. In February 2009 Congress passed the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ), which ultimately reduced the refundability threshold to $3,000 for 2009 and 2010. This proposal was estimated to cost $14.8 billion over 10 years. At the end of 2010, both the EGTRRA and ARRA provisions of the child tax credit (see Table 2 ) were scheduled to expire. Since ARRA's changes to the refundability threshold built upon changes made by EGTRRA, the expiration of EGTRRA would effectively terminate the expansion of refundability made by the 2009 stimulus law (ARRA). Absent an extension of EGTRRA, the maximum amount of the child tax credit would have reverted to $500 per child, the credit would only have been refundable to families with three or more children using the alternative formula, and the amount of the child tax credit would not have been allowed in full against the AMT. In December 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ), which extended both the EGTRRA provisions of the child tax credit and the expansion of refundability from ARRA for two years through the end of 2012. At the end of 2012, Congress passed the American Taxpayer Relief Act of 2012 ( P.L. 112-240 ; ATRA). This law made the EGTRRA changes to the child tax credit permanent and extended the $3,000 refundability threshold enacted as part of ARRA for five years, through the end of 2017. The Protecting Americans from Tax Hikes (PATH) Act of 2015 (Division Q of P.L. 114-113 ) made the ARRA modification to the child tax credit--the $3,000 refundability threshold--permanent. In addition, the PATH Act modified the taxpayer identification requirement for the credit to specify an ID requirement for each child for whom the credit is claimed. Specifically, a taxpayer claiming the credit must provide a valid Taxpayer Identification Number (TIN) for each qualifying child on their federal income tax return. Valid TINs include individual taxpayer identification numbers (ITINs), Social Security numbers (SSNs), and adoption taxpayer identification numbers (ATINs). ITINs are issued by the Internal Revenue Service (IRS) to noncitizens who do not have and are not eligible to receive SSNs. ITINs are supplied solely so that noncitizens are able to comply with federal tax law, and do not affect immigration status. The law also required that the TIN--for both the qualifying child and the taxpayer--be issued on or before the due date of the return. At the end of 2017, Congress passed the 2017 tax revision ( P.L. 115-97 ) which made numerous changes to the federal income tax for individuals and businesses, including temporarily expanding the child tax credit. These temporary changes to the child tax credit are summarized in Table 1 . The law doubled the maximum amount of the credit from $1,000 to $2,000 per qualifying child and increased the maximum amount of the refundable portion of the credit (the additional child tax credit or ACTC) from $1,000 per qualifying child to $1,400 per qualifying child. While in effect, the expanded ACTC amount can be annually adjusted for inflation using the chained consumer price index. (The law uses an indexing convention that rounds the $1,400 amount to the next lowest multiple of $100.) The law also lowered the income level at which taxpayers could begin receiving the ACTC from $3,000 to $2,500. Finally, the law increased the income level at which the credit begins to phase out from $75,000 to $200,000 for unmarried taxpayers, and from $110,000 to $400,000 for married taxpayers filing joint returns. Aside from the inflation adjustment of the ACTC, all other parameters of the child tax credit are not adjusted for inflation. In addition, the law temporarily required taxpayers to provide an SSN associated with work authorization for any child for whom they claim the credit. The SSN must be issued before the due date of the tax return. Failure to provide the child's current SSN could result in the taxpayer being denied the credit (both the nonrefundable and refundable portions of the credit). The law did not change the ID requirement for the taxpayer. Finally, the law created a new temporary "family credit" for non-child credit eligible dependents (children ineligible for the child tax credit or older non-child dependents). Non-child credit eligible dependents excludes otherwise eligible dependents who are not U.S. citizens and are residents of Mexico or Canada. The credit is equal to $500 per non-child credit eligible dependent. The amount is not annually adjusted for inflation. The phaseout parameters of the child credit (e.g., phaseout thresholds of $400,000 married filing jointly, $200,000 other taxpayers, 5% phaseout rate) apply to the family credit. The family credit is not annually adjusted for inflation. All the modifications to the child tax credit and the new family credit are currently scheduled to expire at the end of 2025.

The child tax credit was initially structured in the Taxpayer Relief Act of 1997 (P.L. 105-34) as a $500-per-child nonrefundable credit to provide tax relief to middle- and upper-middle-income families. Since 1997, various laws have modified key parameters of the credit, expanding the availability of the benefit to more low-income families while also increasing the value of the tax credit. The first significant change to the child tax credit occurred with the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16). EGTRRA increased the amount of the credit over time to $1,000 per child and made it partially refundable under the earned income formula. The refundable portion of the credit--the amount that exceeds income tax liability--is often referred to as the additional child tax credit or ACTC. Subsequent legislation enacted in 2003 and 2004 accelerated the implementation of the changes made under EGTRRA. In 2008 and 2009, Congress passed legislation--the Emergency Economic Stabilization Act of 2008 (EESA; P.L. 110-343) and the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5)--that further expanded the availability and amount of the credit to taxpayers whose income was too low to either qualify for the credit or be eligible for the full credit. ARRA lowered the refundability threshold to its current level of $3,000 for 2009 through 2010. The ARRA provisions were subsequently extended several times and made permanent by the Protecting Americans from Tax Hikes (PATH) Act of 2015 (Division Q of P.L. 114-113). At the end of 2017, Congress enacted P.L. 115-97 which, in addition to making numerous changes to the tax code, temporarily changed the child tax credit. Specifically, the law increased the credit for many (though not all) taxpayers by doubling the maximum amount of the credit (and increasing the maximum amount of the ACTC to $1,400), increasing the income at which the credit begins to phase out, and reducing the refundability threshold. In addition, this law temporarily modified the identification (ID) number requirement of the credit, requiring taxpayers to provide the Social Security number (SSN) for every child for whom they claimed the credit. P.L. 115-97 also created a new temporary "family credit" for non-child credit eligible dependents (children ineligible for the child tax credit or older non-child dependents). Non-child credit eligible dependents excludes otherwise eligible dependents who are citizens of Mexico or Canada. The credit is equal to $500 per non-child credit eligible dependent. The amount is not annually adjusted for inflation. The phaseout parameters of the child credit (i.e., phaseout thresholds of $400,000 married filing jointly, $200,000 other taxpayers, 5% phaseout rate) apply to the family credit. The family credit is not annually adjusted for inflation. All the modifications to the child tax credit and the new family credit are currently scheduled to expire at the end of 2025.

Research on former foster youth is limited and most of the studies on outcomes for these youth face methodological challenges. For example, they include brief follow-up periods; have low response rates, non-representative samples, and small sample sizes; and do not follow youth prior to exit from foster care. Few studies include comparison groups to gauge how well these youth are transitioning to adulthood in relation to their peers in the foster care population or general population. However, two studies--the Northwest Foster Care Alumni Study and the Midwest Evaluation of the Adult Functioning of Former Foster Youth--have tracked outcomes for a sample of youth across several domains, either prospectively (following youth in care and as they age out and beyond) or retrospectively (examining current outcomes for young adults who were in care at least a few years ago), and compared these outcomes to other groups of youth, either those who aged out and/or youth in the general population. Nonetheless, these studies focus only on youth who were in foster care in four states. The 1999 law ( P.L. 106-169 ) authorizing the Chafee Foster Care Independence Program (CFCIP) required that HHS develop a data system to capture the characteristics and experiences of certain current and former foster youth across the country. The law directed the Department of Health and Human Services (HHS) to consult with state and local public officials responsible for administering independent living and other child welfare programs, child welfare advocates, Members of Congress, youth service providers, and researchers to (1) "develop outcome measures (including measures of educational attainment, high school diploma, avoidance of dependency, homelessness, non-marital childbirth, incarceration, and high risk behaviors) that can be used to assess the performances of States in operating independent living programs"; and (2) identify the data needed to track the number and characteristics of children receiving independent living services, the type of services provided, and state performance on the measures. In response to these requirements, HHS created the National Youth in Transition Database (NYTD). The final rule establishing the NYTD became effective April 28, 2008, and it required states to report data to HHS on youth beginning in FY2011. This report provides summary and detailed data for FY2011 through FY2013. HHS uses NYTD to engage in two data reporting activities. First, states report information twice each fiscal year on eligible youth who currently receive independent living services regardless of whether they continue to remain in foster care, were in foster care in another state, or received child welfare services through an Indian tribe or privately operated foster care program. These youth are known as served youth . Independent living services refer to the supports that youth receive--such as academic assistance and career preparation services--to assist them as they transition to adulthood. Second, states report information on foster youth on or about their 17 th birthday, two years later on or about their 19 th birthday, and again on or about their 21 st birthday. In this second group, foster youth at age 17 are known as the baseline youth, and at ages 19 and 21 they are known as the follow-up youth (and are also referred to as tracked youth in this report). These current and former foster youth are tracked regardless of whether they receive independent living services at ages 17, 19, and 21. States may track a sample of youth who participated in the outcomes collection at age 17 to reduce the data collection burden. Information is to be collected on a new group of foster youth at age 17 every three years. Table 1 includes an overview of data on the served youth who received an independent living service and the type of services they received for each of FY2011 through FY2013. The number of youth receiving an independent living service in each of those years ranged from about 97,500 to nearly 102,000. Across all three years, youth were 18 years old, on average, and more than half were female (51% to 52%). The largest share of youth were white (41%-42%) followed by black (29%-31%) and Hispanic youth (19%). About 7 out of 10 youth were in foster care when they reported receiving a service. Youth generally had less than a 12 th grade level of education, and about one out of five received special education instruction during a given fiscal year. In addition, nearly one out of five had been adjudicated delinquent, meaning that a court has found the youth guilty of committing a delinquent act. Among the most frequently received services in most of the three years were academic support to assist the youth with completing high school or obtaining a general equivalency degree (GED), such as academic counseling and literacy training; career preparation services that focus on developing a youth's ability to find, apply for, and retain appropriate employment, including vocational and career assessments and job seeking and job placement support; and an independent living needs assessment to identify the youth's basic skills, emotional and social capabilities, strengths, and needs to match the youth with appropriate independent living services (see Figure 1 ). About 60% of youth received three or more independent living services. Table 2 summarizes the characteristics and outcomes of the 19-year-old follow-up youth in FY2013. These youth--part of the follow-up population--were initially surveyed in FY2011 (at "baseline") when they were 17 years of age. The table displays information for the entire surveyed group of 19-year-olds (youth overall) as well as four sub-categories of these youth: those who were in foster care and those who were not, and those who had received at least one independent living service and those who had not. These categories are not mutually exclusive. Most of the 19-year-old youth who were in foster care also received at least one independent living service. Therefore, the data for these two groups are similar. In total, 7,536 youth participated in the survey at age 19 (this is compared to 15,597 who participated at age 17). Those who did not participate had declined to participate, were considered to be on runaway or missing status; could not be otherwise located; were incapacitated or incarcerated; or were deceased. Figure 2 includes data on selected outcomes for youth in foster care and those who are no longer in foster care. Slightly more than half of the 19-year-old youth participants were male. The largest share of youth were white (42%), followed by black (31%) and Hispanic (19%) youth. Youth were asked about their outcomes across six areas--financial self-sufficiency, educational (academic or vocational) training, positive connections with adults, homelessness, high-risk behaviors, and access to health insurance. About one-third of youth were working full-time and/or part-time at age 19; however, youth in foster care were more likely to be working part-time and youth not in foster care or not receiving any independent living service were slightly more likely to be working full-time. Approximately 30% of youth had completed an apprenticeship, internship, or other type of on-the-job training in the past year. (For comparison, approximately 13% of these youth were working full-time and/or part-time and 20% had completed employment-related skills training when they were surveyed at age 17). The 19-year-old youth were about equally likely to receive Social Security benefits, either Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) (12% to 14%), regardless of foster care status or receipt of independent living services. (About the same share of these youth was receiving Social Security at age 17.) Youth not receiving any independent living services were slightly less likely to report receiving other ongoing financial support (11% versus 13%-17%). Youth who were in foster care at age 19 did not qualify for public supports such as financial assistance, food assistance, and public housing. The other groups of 19-year-old youth--those not in care, those receiving at least one independent living service (and not in care), and youth not receiving any independent living services (and not in care)--were equally likely to receive such public supports. Overall, youth were most likely to have a high school diploma (56%) or its equivalent. Educational outcomes were notably distinct for follow-up youth at age 19 depending on whether or not they were in foster care or whether they received an independent living service. Youth who were in foster care at age 19 and/or who received at least one independent living service were also slightly more likely to have a high school diploma or equivalent than those youth who were not in care or had not received at least one independent living service (58%-60% versus 52%-53%). Overall, 54% of youth were enrolled in school at age 19, which could include high school, college, or vocational school. Among youth in foster care, 70% were currently enrolled. This is compared to 44%-62% of youth in the other three subgroups (youth not in care, youth receiving at least one independent living service, and youth not receiving at least one such service). (Also for comparison, when these youth were age 17, almost all (93%) were attending school and 8% had obtained a high school diploma or its equivalent.) Almost all youth at age 19--regardless of foster care status or receipt of independent living services--said that they had a positive connection to an adult who could serve in a mentoring or substitute parent role, including a relative, former foster parent, birth parent, or older member of the community. (Nearly all youth had reported the same when they were surveyed at age 17.) Most of the 19-year-old youth had not experienced homelessness in their lifetime, and youth in foster care were much less likely to report being homeless than the other groups (11% versus 18%-24%). (This is compared to 16% of youth overall when they were surveyed at age 17.) Youth in care at age 19 were also less likely to report having been incarcerated (14% versus 20%-29%). About the same share of youth (13%-17%) self-referred or were referred for an alcohol or drug abuse assessment or counseling during the fiscal year, regardless of foster care or independent living status. Youth in care and/or receiving at least one independent living service were slightly less likely to report that they had ever given birth to, or fathered, any children (9%-10% versus 13%-14%). In general, nearly 9 out of 10 youth had Medicaid or some other health insurance at age 19 (about the same share of youth had health insurance coverage at age 17). Youth in care and/or youth receiving at least one independent living service were more likely to report having health insurance (95%-99%), compared to youth not in care nor receiving independent living services (74%-88%). Most youth in care or receiving at least one independent living service received Medicaid coverage (81%-85%). About the same share of youth (14% to 17%), regardless of foster care status or their receipt of independent living services, had other health insurance. Among youth who had health insurance, youth receiving at least one independent living service and/or not in foster care were slightly more likely than youth in foster care and/or not receiving any independent living services to have insurance coverage for at least some prescription drugs (77%-78% versus 70%-72%).

Congress has long been concerned with the well-being of older youth in foster care and those who have recently emancipated from care without going to a permanent home. Research on this population is fairly limited, and the few studies that are available have focused on youth who live in a small number of states. This research has generally found that youth who spend time in foster care during their teenage years tend to have difficulty as they enter adulthood and beyond. The Chafee Foster Care Independence Act (P.L. 106-169), enacted in 1999, specified that state child welfare agencies provide additional supports to youth transitioning from foster care under the newly created Chafee Foster Care Independence Program (CFCIP). The law also directed the U.S. Department of Health and Human Services (HHS), which administers child welfare programs, to consult with stakeholders to develop a national data system on the number, characteristics, and outcomes of current and former foster youth. In response to these requirements, HHS created the National Youth in Transition Database (NYTD) under a final rule promulgated in 2008. The rule requires that each state child welfare agency commence collecting and reporting the data beginning in FY2011 (October 1, 2010). This report provides summary and detailed data about current and former foster youth, as reported by states to HHS via the National Youth in Transition Database (NYTD). Data are available on two sets of youth. First, states report information each fiscal year on eligible youth who currently receive independent living services regardless of whether they continue to remain in foster care, were in foster care in another state, or received child welfare services through an Indian tribe or privately operated foster care program. These youth are known as served youth. Data on served youth are intended to show how many youth received independent living services. Second, states report information on foster youth on or about their 17th birthday, on or about their 19th birthday, and on or about their 21st birthday. This reported information is based primarily on data collected through surveys of the youth. In this second group, foster youth at age 17 are known as the baseline youth, and at ages 19 and 21 they are known as the follow-up youth. Data from the tracked population of youth are intended to show education, work, health, and other outcomes of youth who were in foster care at age 17. These current and former foster youth are tracked regardless of whether they receive independent living services at ages 17, 19, and 21. As noted, states began reporting NYTD data to HHS for served and baseline youth in FY2011. The data in this report include those for served youth in FY2011 through FY2013 and for follow-up youth for FY2013. Between 97,000 and 102,000 youth received an independent living service in each of FY2011 through FY2013. The median age of these youth was 18. In each of the three years, the most common independent living services they received were academic support, career preparation, and education about housing and home management. Approximately 7,500 follow-up youth were surveyed about their outcomes at age 19. About one-third of youth were working full-time and/or part-time. Just over half (54%) were enrolled in school. Almost all of the youth had a positive connection with an adult who could serve in a mentoring or substitute parent role. Most youth had not experienced homelessness or incarceration in their lifetimes. The majority of youth had Medicaid or some other health insurance. However, youth who were no longer in foster care tended to have more negative outcomes on certain indicators. For example, youth in foster care were much less likely to report ever having been homeless compared to youth who left care (11% versus 24%). Likewise, they were less likely to report having ever been incarcerated compared to these same peers (14% versus 29%).

Located along the Pacific coast of South America, Chile is a politically stable, upper-middle-income nation of 18 million people. The country declared independence from Spain in 1810 but did not achieve full independence until 1818. Chile enjoyed mass electoral democracy from 1932 until 1973, when the Chilean military, under the control of General Augusto Pinochet, deposed the democratically elected Marxist government of President Salvador Allende (1970-1973). More than 3,200 people were killed or "disappeared" and some 38,000 people were imprisoned and/or tortured during Pinochet's 17-year dictatorship. Chile ultimately restored democratic governance in 1990. A center-left coalition of parties, known as the "Coalition of Parties for Democracy" ( Concertacion ), governed Chile for two decades after the return to democratic rule. While the Concertacion governments were significantly constrained by authoritarian provisions in the Pinochet-era constitution, they were able to enact incremental political, economic, and social reforms. They largely maintained the market-oriented economic framework they inherited from Pinochet and built upon it by negotiating a broad network of trade agreements designed to foster export-led development. Chile has implemented trade agreements with some 60 countries and now has open and reciprocal access to major consumer markets, such as China, Japan, the European Union, and the United States. The Concertacion also institutionalized countercyclical fiscal policies and gradually strengthened Chile's social safety net. Sebastian Pinera of the center-right "Alliance for Chile" ( Alianza ) coalition broke the Concertacion's hold on power, serving as president from 2010-2014, but his administration largely maintained the same policy mix. Analysts credit Chile's policy framework for the significant economic and social gains that the country has made over the past 25 years. Real annual economic growth has averaged over 5% since 1990, lifting Chile's gross domestic product (GDP) to $258 billion and per capita GDP to $14,480 in 2014. The percentage of Chileans living below the national poverty line fell from 39% in 1990 to 8% in 2013, and the percentage of Chileans living in extreme poverty fell from 13% to 2.5% during the same time period. Nevertheless, many Chileans have expressed discontent with the socioeconomic situation in their country. They are dissatisfied with the country's high level of inequality and believe that the country's economic gains have not translated into better living conditions and public services for most Chileans. The Gini coefficient, which is used to measure income concentration, has barely changed over the past decade, remaining near 0.53. Although it falls to 0.50 when taxes and government transfers are taken into account, it is well above the Organisation for Economic Cooperation and Development (OECD) average of 0.31. Moreover, intergenerational social mobility is low since the education system tends to replicate existing class disparities. Chileans have also become increasingly dissatisfied with their political leaders and institutions, which have proven unable or unwilling to address these socioeconomic concerns. The country's unique binomial electoral system, a legacy of the Pinochet dictatorship, significantly limits the responsiveness of the Chilean government. Under the binomial system, deputies and senators are elected from two-member electoral districts that require a coalition to win by two-to-one margins in order to secure both seats. Since it effectively ensures a relatively equal distribution of power between the two major political coalitions regardless of voters' preferences, elections are extremely limited in their ability to produce change. Moreover, municipal and regional governments have little authority and few resources to address local concerns since political power is heavily concentrated in the central government. Given these constraints on electoral democracy, many Chileans have taken to the streets in recent years to voice their demands and hold their leaders accountable. Students calling for the government to guarantee free, high-quality education have organized the largest and most persistent of the protests. Seeking to capitalize on popular discontent and return to power, the four parties of the Concertacion joined with various social movement leaders, the Communist Party, and other left-leaning groups to form the "New Majority" ( Nueva Mayoria ) coalition for Chile's 2013 general elections. The coalition selected former President Michele Bachelet (2006-2010) as its presidential candidate and pledged to implement a series of ambitious policy changes designed to reduce inequality and improve social mobility. The three pillars of Bachelet's platform were a major fiscal reform, an overhaul of the education system, and a new constitution. Bachelet easily defeated the Alianza's Evelyn Matthei, 62%-38%, in a second round runoff election. In legislative elections held concurrently with the first-round presidential vote, Bachelet's coalition secured one of the largest congressional majorities since Chile's return to democracy, with 67 of 120 seats in the Chamber of Deputies and 21 of 38 seats in the Chilean Senate (see Figure 1 ). President Bachelet has quickly moved forward with her policy agenda since assuming office for a four-year term in March 2014. Her first major initiative was a fiscal reform, which she signed into law in September 2014. It will be phased in over four years and is designed to increase revenues by 3% of GDP ($8.2 billion) by 2018. The majority of the new revenues will come from increasing the corporate tax rate from 20% to at least 25%. The reform also abolishes a business tax credit, taxes stationary sources of pollution such as fossil fuel power plants, increases taxes on tobacco and alcohol, reduces the top individual tax rate from 40% to 35%, and offers new incentives to small- and medium-size enterprises for savings and investment. Bachelet intends to use the additional revenue resulting from the fiscal reform to finance changes to Chile's education system, ensure the government budget is structurally balanced, and strengthen public health, pension, and social protection programs. Since the enactment of the fiscal reform, much of the political debate in Chile has focused on overhauling the education system. President Bachelet signed into law several initial education reforms in May 2015. Those changes, which are scheduled to take effect in March 2016, will cut off government funding to for-profit educational institutions and forbid primary and secondary schools that receive government funding from selectively admitting students. The Chilean Congress is still debating additional education reforms, including measures to strengthen teacher training, transfer school supervision from municipalities to the central government, and guarantee free post-secondary education for most students. The Bachelet Administration's 2016 budget proposal would enable 200,000 students whose families are in the bottom half of the income distribution to attend accredited nonprofit higher education institutions without paying tuition. In October 2015, President Bachelet announced a process for fulfilling her third major electoral pledge, the adoption of a new constitution. Over the course of the next year, the Bachelet Administration intends to educate citizens about the issues involved, hold a national dialogue to hear what Chileans would like to include in the constitution, and send a measure to the Chilean Congress that would authorize the next Congress--scheduled to take office in 2018--to select a mechanism for considering a new constitution. The new constitution would need to be approved by congressional supermajorities and a national referendum. The current constitution was adopted in 1980 under the Pinochet dictatorship. While many provisions have been amended since the reestablishment of democracy, some sectors of Chilean society still view it as illegitimate. Bachelet highlighted a number of potential constitutional changes in her electoral platform, including the recognition of various citizen rights and decentralization of power to regional governments. As a result of an overhaul of the electoral system that President Bachelet signed into law in April 2015, the next Chilean Congress will be elected through proportional representation. Under the new system, each of Chile's 15 regions will elect between two and five senators, and Chileans will be divided into 28 multi-member electoral districts that will elect between three and eight deputies, depending on their population. The electoral reform will increase the number of seats in the Chamber of Deputies from 120 to 155 and the number of seats in the Senate from 38 to 50. It will also require political parties to ensure that no more than 60% of their candidates are the same gender. While advocates of the previous binomial electoral system maintain that it fostered political stability and consensus-based politics, detractors note that it significantly limited the ability of Chilean citizens to enact policy changes and hold their leaders accountable. In addition to these large-scale reforms of Chile's tax, education, and political systems, Bachelet and her New Majority coalition are pushing ahead with a number of other notable policy initiatives. These include a union-empowering labor reform, the creation of a state-run pension fund to compete with private retirement plans, decriminalization of abortion in certain circumstances, and repeal of the amnesty law that shields members of the Pinochet regime and security forces who committed human rights abuses between 1973 and 1978. They have already enacted a law establishing civil unions for same-sex couples. Many of these policy changes only require simple majorities in Congress and are likely to be enacted in some form. In the aftermath of a series of scandals that have tarnished much of the Chilean political establishment over the past year, the Bachelet Administration has focused on advancing anti-corruption policies. Chilean authorities have brought charges against several business executives and politicians from the right-wing Independent Democratic Union party--part of the opposition Alianza coalition--who allegedly were involved in a scheme to illegally finance the party and evade taxation. Other corruption scandals have implicated members of the governing New Majority Coalition. One case involves Bachelet's son, who is accused of using his influence during the presidential campaign to secure a $10 million real estate loan from one of Chile's most prominent businessmen. These corruption scandals have reinforced public perceptions in Chile that wealth and power are too concentrated in the hands of a small number of business and political elites who use their connections to exert influence and advance their economic interests. In an attempt to regain the initiative, Bachelet has introduced a series of anti-corruption bills, including measures to make campaign financing more transparent and impose tougher sanctions for corruption. A little over a year and a half into her term, the Chilean public remains divided over President Bachelet's reform agenda. While students, unions, and other groups have continued to hold demonstrations and have called on Bachelet and the Chilean Congress to enact more far-reaching policy changes more quickly, some economic and political analysts maintain that Chilean policymakers should slow down in order to reassure the business community and establish broader consensus on significant policy changes. Similar divisions have emerged within Bachelet's ideologically diverse New Majority coalition, which ranges from the Communist Party on the far left to the Christian Democratic Party in the center. Opinion polls have shown that nearly all of Bachelet's reforms have had broad public support upon their introduction, but they have become less popular over time as they have been subject to protracted debates in the Chilean Congress. President Bachelet's approval rating has declined significantly since she took office, with divisions regarding her reform agenda, recent corruption scandals, and the weakening economy (see " Economic Challenges " below) taking a toll on her popularity. In October 2015, 29% of Chileans approved of Bachelet's performance in office while 67% disapproved. Bachelet's approval rating has slightly improved from a low of 24% in August 2015, but is still far below the 54% approval rating she had upon taking office in March 2014. Chileans appear to be dissatisfied with the entire political class as the approval ratings for the governing New Majority coalition (22%), the opposition Alianza coalition (15%), the Senate (14%), and the Chamber of Deputies (10%) are even lower. President Bachelet is also attempting to address Chile's slowing economy. According to many analysts, Chile has the most competitive and fundamentally sound economy in Latin America, but it remains heavily dependent on the copper industry, which accounted for over half of Chile's exports and 11% of the country's GDP in 2014. While the global commodity boom contributed to an extended period of economic growth and job creation last decade, copper prices have steadily declined since 2011, taking a toll on the economy. Chile's economic growth slowed to 1.9% in 2014. Economic analysts attribute the deceleration to a sharp decline in private investment stemming from the drop in copper prices and other external factors, as well as a fall in business confidence that appears to be related to the Bachelet Administration's reforms. The Chilean government has sought to stimulate economic growth over the past year. The Bachelet Administration's 2015 budget increased public expenditure by nearly 10%, boosting spending on infrastructure and allocating additional resources for education, healthcare, and social welfare programs. Chile is in a relatively strong position to pursue countercyclical fiscal policies since gross public debt remains low (15.1% of GDP at the end of 2014) and it can draw from its Economic and Social Stabilization Fund, which holds $14.1 billion (equivalent to about 5.5% of GDP). The Chilean Central Bank has complemented the Bachelet Administration's fiscal stimulus with an expansionary monetary policy. Buoyed by these measures, Chile's annual economic growth is forecast to accelerate slightly to 2.3% in 2015. Growth is expected to remain well below the 2005-2014 average of 4.3% for several years, however, as the slowdown in China's economy, lower global commodity prices, and other global developments weigh down the country's open economy. Analysts maintain that while the Bachelet Administration's reforms are also likely to have a negative impact on short-term economic activity, they have the potential to boost productivity and long-term growth. Chile is one of the safest countries in Latin America, with a homicide rate of 3.1 per 100,000 residents; however, small militant groups have carried out sporadic acts of violence. Over the past decade, more than 200 explosive devices have been planted outside banks, government buildings, and religious institutions in Santiago in generally low-level attacks that Chilean authorities have attributed to anarchist groups. Although most of the attacks have taken place in the middle of the night and have caused few casualties, an explosion near a subway station in Santiago injured 14 people in September 2014, and another explosion a few weeks later killed a man. Some members of the Mapuche (indigenous) community have also engaged in acts of violence. The Mapuche account for about 9% of the Chilean population and are primarily located in Santiago and the central and southern regions of Biobio, Araucania, Los Rios, and Los Lagos (see Figure A-1 for a map of Chile). They experience higher poverty levels, lower education levels, and poorer living standards than the general Chilean population, and have long sought official recognition of their rights and restoration of their territories. Some Mapuche groups have employed militant means to achieve those objectives, occupying ancestral lands and destroying vehicles, machinery, and buildings located upon them. While most of the attacks have resulted in damaged property, a Mapuche activist was convicted of killing an elderly couple by setting fire to their remote ranch in 2013. The September 2014 anarchist bombings in Santiago and ongoing attacks by Mapuche activists in southern Chile have led to a renewed focus on Chile's antiterrorism law. The law dates to the Pinochet regime but has been amended several times since the return to democracy. It sets harsher penalties for crimes deemed to be terrorist acts and allows the government to detain those accused of such acts and hold them without bail before trial, among other provisions. Local and international human rights groups have criticized the Chilean government numerous times over the years for invoking the law to prosecute Mapuche activists. In July 2014, for example, the Inter-American Court of Human Rights ordered the Chilean government to overturn the convictions of eight Mapuche activists who had been charged under the anti-terrorism law. While some legislators from the New Majority coalition have called for the anti-terrorism law to be repealed, the recent attacks have led others to call for a stronger anti-terrorism legal framework. The Bachelet Administration has proposed several amendments to the anti-terrorism law, which are currently pending in Congress. They include changes to allow the infiltration of terrorist organizations by covert police officers and to extend the law to cover so-called "lone-wolf" terrorists. Bachelet has also announced special preventative measures to protect truckers after a series of arson attacks in southern Chile. Some members of the opposition Alianza coalition have criticized Bachelet's proposals and actions as insufficient and have called for the government to apply the anti-terrorism law to arsons and other attacks carried out by Mapuche activists. The United States and Chile have traditionally enjoyed friendly relations. Over the past seven years, the Obama Administration has sought to maintain close ties with Chile while encouraging its leadership in Latin America and on the international stage. President Obama hosted President Bachelet at the White House in June 2014, calling her return to office "an opportunity to strengthen further the outstanding relationship between the United States and Chile." Congress has expressed particular interest in U.S.-Chilean trade and investment relations, security ties, and energy cooperation. The countries also collaborate on various areas of scientific research, such as astronomy and glacier monitoring, and engage in so-called trilateral cooperation to support security, governance, and socioeconomic development in other Latin American and Caribbean countries. U.S.-Chilean trade relations have grown considerably since the U.S.-Chile Free Trade Agreement entered into force on January 1, 2004. The agreement immediately eliminated tariffs on 87% of bilateral trade; 100% of U.S. exports enter Chile duty free as of this year (2015). In the absence of the agreement, each nation's exports would be subject to the other's most-favored nation tariff rates. In 2014, Chile's average applied most-favored nation tariff was 6%, while that of the United States was 3.5%. The agreement thus provides each country with preferential access to the other's market. Total bilateral trade has quadrupled since the agreement was signed, growing from $7.9 billion in 2003 to $31 billion in 2014 (see Figure 2 ). U.S.-Chile merchandise trade was valued at $26 billion in 2014. Between 2003 and 2014, U.S. exports to Chile increased over 500% and U.S. imports from Chile increased over 150%. As a result of U.S. exports increasing more quickly than imports, the United States has run a trade surplus in merchandise with Chile since 2008. In 2014, the surplus was valued at $7 billion. U.S. merchandise exports to Chile amounted to $16.5 billion, with refined oil products, heavy machinery, and civilian aircraft and parts accounting for a majority. U.S. merchandise imports from Chile amounted to $9.5 billion, with copper, edible fruit, and seafood accounting for a majority. In 2014, the United States was Chile's second-largest trading partner, behind China, while Chile was the United States' 29 th -largest trading partner. U.S.-Chile services trade has also grown under the free trade agreement, amounting to $5 billion in 2014. U.S. services exports to Chile totaled $3.8 billion and U.S. services imports from Chile totaled $1.2 billion. Travel, transport, and intellectual property charges were the top categories for U.S. services exports to Chile while transport and travel were the top categories for U.S. services imports from Chile. Travel between Chile and the United States is likely to increase in the coming years since the U.S. Department of Homeland Security approved Chile for entry into the Visa Waiver Program in 2014, allowing Chilean citizens who meet certain requirements to travel to the United States for up to 90 days without a visa. Chile has extended the same policy to U.S. citizens. Chile and the United States have both participated in negotiations concerning the Trans-Pacific Partnership (TPP), a proposed 12-member Asia-Pacific regional trade agreement that includes Australia, Brunei, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. While TPP trade ministers announced that they had concluded the agreement on October 5, 2015, it still needs to be ratified in each of the participating nations. The 114 th Congress may consider the TPP under the rules and procedures set forth in the Bipartisan Comprehensive Trade Priorities Act ( P.L. 114-26 ), commonly known as trade promotion authority (TPA), which the House and Senate approved, and President Obama signed into law, in June 2015. During TPP negotiations, many Chilean analysts and policymakers expressed concerns about the potential agreement. They argued that since Chile already has trade agreements with each of the other participating nations, it should only sign onto the TPP if it provides more favorable conditions. Some expressed concerns that the agreement could serve as an indirect renegotiation of Chile's existing trade agreement with the United States, and that it could lead to concessions on issues like pharmaceutical patents that would restrict the country's autonomy to determine public policies that benefit the Chilean public. Although President Bachelet expressed similar concerns about the TPP during her election campaign, she has defended the agreement since taking office. She maintains that the agreement would open up new opportunities for Chilean exporters since the TPP "has developed new high-standard rules for international trade" that go beyond the provisions included in Chile's existing trade agreements with other TPP members. She also maintains that the final agreement would not impose stricter pharmaceutical patents protections than those already in place as a result of the U.S.-Chile Free Trade Agreement. Analysts expect that Bachelet will be able to secure ratification from the Chilean Congress within about five months. The U.S. Trade Representative (USTR), U.S. business groups, and some Members of Congress assert that Chile has not adhered to its intellectual property rights commitments. USTR placed Chile on its Priority Watch List in 2015, as it has every year since 2007, as a result of "serious concerns regarding long-standing intellectual property rights issues under the U.S.-Chile Free Trade Agreement." In its annual Special 301 Report on intellectual property rights, USTR urged Chile to provide greater protection for pharmaceutical patents and plant varieties and to amend its Internet Service Provider liability regime to permit more effective action against piracy over the Internet. Given the long-standing nature of these complaints, some Members of Congress have called on USTR to initiate formal dispute settlement proceedings against Chile. The Chilean government asserts that it has developed a solid institutional framework to protect intellectual property rights over the past decade, and that it continues to improve its system while trying to maintain a balance between fostering innovation and ensuring Chileans have access to knowledge and medications. It argues that USTR's Special 301 Report fails to acknowledge the advances that Chile has made, lacks clear criteria for categorizing countries, and reflects the desire of U.S. companies "to selectively apply their intellectual property standards to other countries." Furthermore, the Chilean government asserts that the Special 301 Report "does not contribute" to the improvement of bilateral relations. According to the U.S. State Department, Chile is viewed as an attractive destination for investment as a result of its open economy, well-developed institutions, and strong rule of law. As of 2014, the accumulated stock of U.S. foreign direct investment in Chile was $27.6 billion, including more than $12.5 million invested in the mining industry. In comparison, the accumulated stock of Chilean foreign direct investment in the United States was $730 million. In February 2010, the United States and Chile signed an income tax treaty designed to encourage investment in both countries by providing certainty on the tax treatment of investors and reducing tax-related barriers to investment. Among other provisions, the treaty would reduce source-country withholding taxes on certain cross-border payments of dividends, interest, and royalties; establish rules to determine when an enterprise or individual of one country is subject to tax on business activities in the other; enhance the mobility of labor by coordinating the tax aspects of the U.S. and Chilean pension systems; foster collaboration to resolve tax disputes and relieve double taxation; and ensure the full exchange between the U.S. and Chilean tax authorities of information for tax purposes. President Obama submitted the agreement to the U.S. Senate for its advice and consent in May 2012 ( Treaty Doc. 112-8 ). The Senate Foreign Relations Committee held a hearing to consider the treaty, along with seven other pending agreements, on October 29, 2015, and reported the treaty favorably on November 10, 2015. The committee had previously reported the treaty favorably in April 2014, but the full Senate never acted on it before the end of the 113 th Congress. General John F. Kelly, Commander of the U.S. Southern Command, has characterized Chile as a strong, capable partner; a regional leader; and an outstanding contributor to hemispheric and international security. Chile has supported peacekeeping efforts in Haiti since 2004, when it quickly responded to the U.N. Security Council's request for peacekeepers, and paved the way for a number of other Latin American countries to contribute troops to the U.N. Stabilization Mission in Haiti (MINUSTAH). Chile has committed more human and material resources to MINUSTAH than it has to any previous peacekeeping mission and currently has 331 troops and 3 police officers on the ground. Chile has also provided training to Central American police and militaries and participated in Operation Martillo --a multinational and interagency drug interdiction effort designed to cut off illicit trafficking routes along the coasts of Central America. Chile is also one of four countries directly supporting peace talks between the Colombian government and the Revolutionary Armed Forces of Colombia ( Fuerzas Armadas Revolucionarias de Colombia , FARC). In order to foster closer security ties, the United States provides some foreign aid to Chile. U.S. security aid to Chile amounted to slightly less than $1.1 million in FY2014 and FY2015 (see Table 1 ). It is currently unclear how much security aid will be provided in FY2016 since Congress has yet to adopt a full year appropriations bill. Programs are currently being funded through a continuing resolution ( P.L. 114-53 ) that funds most aid programs and activities at the FY2015 level, minus an across-the-board reduction of 0.2108%, until December 11, 2015. The Obama Administration requested $700,000 in security assistance for Chile in FY2016. $500,000 would fund training for the Chilean military designed to promote professional development and technical capabilities, strengthen civil-military relationships, and increase interoperability with U.S. forces. The other $200,000 would support the Chilean government's efforts to develop a nonproliferation-driven strategic trade control system that meets international standards. In June 2013, the United States and Chile signed an extradition treaty. It would replace the treaty that is currently in place, which dates to 1900, in order to modernize the list of extraditable offenses, allow for the extradition of individuals regardless of their nationalities, and incorporate procedural changes designed to accelerate the extradition process. President Obama submitted the agreement, known as the "Extradition Treaty Between the Government of the United States of America and the Republic of Chile," to the U.S. Senate for its advice and consent in September 2014 ( Treaty Doc. 11 3-6 ). The Senate has yet to act on the treaty. The U.S. and Chilean governments have both expressed interest in developing clean energy resources to meet domestic needs and mitigate global climate change. In recent years, however, Chile has become more reliant on carbon-emitting power sources (such as coal-fired thermoelectric plants) as the country has struggled to satisfy its fast-growing demand for energy. Between 2004 and 2014, Chile's total primary energy consumption increased by 27%. During the same time period, Chile's coal consumption increased by 142%, and the percentage of total primary energy consumption accounted for by coal nearly doubled from 10% to 19%. Since Chile is a minor producer of fossil fuels, it is heavily dependent on energy imports. In order to diversify its energy supply, lower fossil fuel emissions, and reduce its reliance on expensive energy imports, Chile adopted a law in 2013 that requires 20% of the national energy mix to be generated from nonconventional renewable energy sources by 2025. President Bachelet's energy strategy reiterates Chile's commitment to that goal and stipulates that 45% of electricity capacity installed between 2014 and 2025 should come from renewable energy sources. Bachelet's energy strategy also aims to make liquefied natural gas (LNG) a larger component of Chile's energy mix. Renewables currently account for about 5.4% of Chile's primary energy consumption while natural gas accounts for 12% (see Figure 3 ). The United States is working with Chile to overcome the financial and technical barriers that have prevented the country from taking advantage of its vast wind, solar, tidal, and geothermal energy potential. In June 2009, under the umbrella of President Obama's "Energy and Climate Partnership for the Americas," the United States and Chile signed a memorandum of understanding on cooperation in clean energy technologies. As a result of the agreement, the U.S. Department of Energy provided support to Chile's Renewable Energy Center and two solar plant pilot projects in the Atacama Desert. Additionally, the Overseas Private Investment Corporation (OPIC), an independent U.S. government agency, has approved nearly $700 million of loan guarantees for five solar energy projects in Chile since 2013. In 2014, the United States and Chile signed a joint statement on expanding bilateral energy cooperation. While continuing to work together on renewable energy, the countries also agreed to collaborate on energy efficiency, electricity grid policy, and oil and natural gas development. Chile's National Petroleum Company ( Empresa Nacional del Petroleo , ENAP) is scheduled to begin importing U.S. LNG by 2016. Chile is in the midst of a political and economic transition. Following the return to democracy in 1990, Chilean leaders and institutions prioritized political stability and economic growth, eschewing ambitious structural reforms in favor of consensus-based politics, orthodox economic policies, and incremental social change. Those preferences allowed Chile to consolidate democratic governance and produce significant improvements in the living standards of its citizens, but they inhibited the political system's ability to address Chile's high level of inequality. Discontent with the limits of the post-Pinochet policy consensus propelled President Bachelet and her New Majority coalition to sizeable electoral victories. While their ambitious fiscal, educational, and constitutional reforms have produced uncertainty and could be damaging to the country's economy and stability if mishandled, they have the potential to foster inclusive growth and revitalize Chile's democratic institutions. U.S.-Chilean relations are likely to remain friendly in the coming years as a result of shared values and common interests. The countries currently cooperate on a range of issues, including trade, security, energy, and scientific research. Congressional approval of the Trans-Pacific Partnership trade agreement and a bilateral income tax treaty could lead to higher levels of trade and investment, while approval of a pending extradition treaty could lead to enhanced security cooperation. The United States and Chile may also discover new areas for collaboration as Chile's ongoing transition to a higher level of economic development enables it to take on additional regional and global responsibilities. Map of Chile Chilean Political Party Acronyms

Chile, located along the Pacific coast of South America, is a politically stable, upper-middle-income nation of 18 million people. In 2013, Michelle Bachelet and her center-left "New Majority" coalition won the presidency and sizeable majorities in both houses of the Chilean Congress after campaigning on a platform of ambitious reforms designed to reduce inequality and improve social mobility. Since her inauguration to a four-year term in March 2014, President Bachelet has signed into law significant changes to the tax, education, and electoral systems. She has also proposed a number of other economic and social policy reforms, as well as a process for adopting a new constitution. Although a significant majority of the public initially supported the reforms, Chileans have grown more divided over time, with some groups pushing for more far-reaching policy changes and others calling for Bachelet to scale back her agenda. Disapproval of the reforms, a corruption scandal that implicated her son, and Chile's slowing economy have taken a toll on President Bachelet's approval rating, which has declined to 29%. Chile's economic growth has slowed considerably in recent years, falling to 1.9% in 2014. Analysts have largely attributed the slowdown to the end of the global commodity boom and the coinciding drop in copper prices, which have a significant impact on the Chilean economy. There are also indications that the Bachelet Administration's policy reforms may have reduced business confidence and dampened growth. In order to stimulate the economy, the Chilean government has implemented expansive fiscal and monetary policies over the past year. Growth is forecast to accelerate slightly to 2.3% in 2015 and gradually increase in the following years. President Obama and President Bachelet have sought to build upon the long-standing partnership between the United States and Chile. Commercial ties are particularly strong. Total trade in goods and services reached $31 billion in 2014, more than quadrupling since the implementation of a free trade agreement in 2004. Trade and investment flows could increase if the Trans-Pacific Partnership (TPP) trade agreement, which includes the United States, Chile, and 10 other nations in the Asia-Pacific region, is approved. The United States and Chile also work together to address regional and global security challenges, such as instability in Haiti. The United States provided Chile with an estimated $1 million in foreign aid in FY2015 to strengthen the capabilities of Chilean security forces and foster closer security ties. The countries' mature partnership includes additional collaboration on issues such as energy development and scientific research. The 114th Congress is currently considering several measures related to U.S.-Chilean relations. Congress may consider implementing legislation for the TPP agreement under the rules and procedures set forth in the Bipartisan Comprehensive Trade Priorities Act (P.L. 114-26, "trade promotion authority"), which both houses passed and the President signed into law in June 2015. The Senate also may consider a bilateral income tax treaty with Chile (Treaty Doc. 112-8), which was signed in 2010, submitted to the U.S. Senate for its advice and consent in 2012, and reported favorably by the Senate Foreign Relations Committee on November 10, 2015. An extradition treaty with Chile (Treaty Doc. 113-6), which was signed in 2013 and submitted to the Senate in September 2014, also awaits the Senate's advice and consent.

Americans spend more than $1 trillion on food each year, nearly half of it in restaurants, schools, and other places outsid e the home. Federal laws give food manufacturers, distributors, and retailers the basic responsibility for assuring that foods are wholesome, safe, and handled under sanitary conditions. A number of federal agencies, cooperating with state, local, and international entities, play a major role in regulating food quality and safety under these laws. The combined efforts of the food industry and the regulatory agencies often are credited with making the U.S. food supply among the safest in the world. Nonetheless, the Centers for Disease Control and Prevention (CDC) reports that each year an estimated one in six Americans--a total of 48 million people--becomes sick from contaminated food foodborne illnesses caused by contamination from any one of a number of microbial pathogens. Of these, an estimated 128,000 cases require hospitalization and 3,000 cases result in death. In addition, experts have cited numerous other hazards to health, including the use of unapproved veterinary drugs, pesticides, and other dangerous substances in food commodities, of particular concern at a time when a growing share of the U.S. food supply is from overseas sources. These concerns, combined with the ongoing recurrence of major food safety-related incidents, have heightened public and media scrutiny of the U.S. food safety system and magnified congressional interest in the issue. Numerous federal, state, and local agencies share responsibilities for regulating the safety of the U.S. food supply. Federal responsibility for food safety rests primarily with the Food and Drug Administration (FDA), which is part of the U.S. Department of Health and Human Services (HHS), and the Food Safety and Inspection Service (FSIS), which is part of the U.S. Department of Agriculture (USDA). FDA is responsible for ensuring that all domestic and imported food products--except for most meats and poultry--are safe, nutritious, wholesome, and accurately labeled. FDA also has oversight of all seafood, fish, and shellfish products. USDA's Food Safety and Inspection Service (FSIS) regulates most meat and poultry and some egg and fish products. The Government Accountability Office (GAO) has identified as many as 15 federal agencies, including FDA and FSIS, as collectively administering at least 30 laws related to food safety. Appendix A and Appendix B provide a brief comparative look at each of these agencies and their responsibilities. State and local food safety authorities collaborate with federal agencies for inspection and other food safety functions, and they regulate retail food establishments. This organizational complexity, and trends in U.S. food markets--for example, increasing imports as a share of U.S. food consumption and increasing consumption of fresh, often unprocessed, foods--pose ongoing challenges to ensuring food safety. The text box below provides a comparison of FDA and USDA and other federal agencies' responsibilities for food safety and related food quality and other requirements. The division of food safety responsibility between FDA and USDA is rooted in the early history of U.S. food regulation. Congress created separate statutory frameworks when it enacted, in 1906, both the Pure Food and Drugs Act and the Meat Inspection Act. The former addressed the widespread marketing of intentionally adulterated foods, and its implementation was assigned to USDA's Bureau of Chemistry. The latter law addressed unsafe and unsanitary conditions in meat packing plants, and implementation was assigned to the USDA's Bureau of Animal Industry. This bifurcated system has been perpetuated and split further into additional food safety activities under additional agencies (for example, the Environmental Protection Agency, the National Marine Fisheries Service, and others) by a succession of statutes and executive directives. The separation of the two major food safety agencies was further reinforced when, in 1940, the President moved responsibilities for safe foods and drugs, other than meat and poultry, from USDA to the progenitor of HHS, the Federal Security Agency. Meat inspection remained in USDA. There has been discussion over time regarding whether this dispersal of food safety responsibilities has been problematic, or whether a reorganization would divert time and attention from other fundamental problems in the system. Figure 1 shows this history by providing a timeline of selected important dates for food safety in the United States. Over the years, GAO has published a series of reports highlighting how food safety oversight in the United States is fragmented and recommending broad restructuring of the nation's food safety system. These GAO reports document examples where a number of federal agencies are responsible for some aspect of food safety or product quality, resulting in split agency jurisdiction for some foods. Limited coordination and sharing of information results in often overlapping and/or duplication of efforts. Similar observations are noted in a series of food safety studies by the National Research Council (NRC) and Institute of Medicine (IOM). The NRC/IOM studies further recommend that the core federal food safety responsibilities should reside within a single entity/agency; have a unified administrative structure, clear mandate, and dedicated budget; and maintain full responsibility for oversight of the entire U.S. food supply. FDA has primary responsibility for the safety of most (about 80%-90%) of all U.S. domestic and imported foods. The FDA is responsible for ensuring that all domestic and imported food products--except for most meats and poultry--are safe, nutritious, wholesome, and accurately labeled. Examples of FDA-regulated foods are produce, dairy products, and processed foods. FDA also has oversight of all seafood and shellfish products, and most fish products (except for catfish). FDA has jurisdiction over meats from animals or birds that are not under the regulatory jurisdiction of FSIS. FDA shares some responsibility for the safety of eggs with FSIS. FDA has jurisdiction over establishments that sell or serve eggs or use them as an ingredient in their products. As described in a memorandum of understanding between FDA and FSIS: FDA is responsible for implementing and enforcing the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301, et seq .), the Public Health Service Act (42 U.S.C. 201, et seq .), the Fair Packaging and Labeling Act (15 U.S.C. 1451 et seq .), and parts of the Egg Products Inspection Act [21 U.S.C. SSSS1031 et seq .]. In carrying out its responsibilities under these acts, FDA conducts inspections of establishments that manufacture, process, pack, or hold foods, with the exception of certain establishments that are regulated exclusively by FSIS. FDA also inspects vehicles and other conveyances, such as boats, trains, and airplanes, in which foods are transported or held in interstate commerce. In addition, the 111 th Congress passed comprehensive food safety legislation with the FDA Food Safety Modernization Act (FSMA, P.L. 111-353 ), amending the Federal Food, Drug, and Cosmetic Act (FFDCA). FSMA was the largest expansion of FDA's food safety authorities since the 1930s. FSMA did not directly address meat and poultry products under USDA's jurisdiction. New rules governing FDA's food inspection regime of both domestic and imported foods under the agency's jurisdiction are now being implemented. For more information, see CRS Report R43724, Implementation of the FDA Food Safety Modernization Act (FSMA, P.L. 111-353) . In the Washington, DC, area, two FDA offices are the focal point for food safety-related activities. The Center for Food Safety and Applied Nutrition (CFSAN) is responsible for (1) conducting and supporting food safety research; (2) developing and overseeing enforcement of food safety and quality regulations; (3) coordinating and evaluating FDA's food surveillance and compliance programs; (4) coordinating and evaluating cooperating states' food safety activities; and (5) developing and disseminating food safety and regulatory information to consumers and industry. FDA's Center for Veterinary Medicine (CVM) is responsible for ensuring that all animal drugs, feeds (including pet foods), and veterinary devices are safe for animals, are properly labeled, and produce no human health hazards when used in food-producing animals. The FDA also cooperates with over 400 state agencies across the nation to carry out a wide range of food safety regulatory activities. However, the state agencies are primarily responsible for actual inspection. FDA works with the states to set the safety standards for food establishments and commodities and evaluates the states' performance in upholding such standards as well as any federal standards that may apply. FDA also contracts with states to use their food safety agency personnel to carry out certain field inspections in support of FDA's own statutory responsibilities. FSIS regulates the safety, wholesomeness, and proper labeling of most domestic and imported meat and poultry and their products sold for human consumption, comprising roughly 10%-20% of the U.S. food supply. As described in a memorandum of understanding between FDA and FSIS, FSIS's jurisdiction is as follows: FSIS is responsible for implementing and enforcing the Federal Meat Inspection Act (21 U.S.C. 601, et seq .), the Poultry Products Inspection Act (21 U.S.C. 451, et seq .), and parts of the Egg Products Inspection Act (21 U.S.C. 1031, et seq .). In carrying out its responsibilities under these acts, FSIS places inspectors in meat and poultry slaughterhouses and in meat, poultry, and egg processing plants. FSIS also conducts inspections of warehouses, transporters, retail stores, restaurants, and other places where meat, poultry, and egg products are handled and stored. In addition, FSIS conducts voluntary inspections under the Agriculture Marketing Act (7 U.S.C. 1621, et seq .). The Federal Meat Inspection Act (FMIA) of 1906, as amended, requires USDA to inspect all cattle, sheep, swine, goats, horses, mules, and other equines slaughtered and processed for human consumption. The Poultry Products Inspection Act (PPIA) of 1957, as amended, gives USDA the authority to inspect poultry meat. The PPIA mandates USDA inspection of any domesticated birds (chickens, turkeys, ducks, geese, guineas, ratites [ostrich, emu, and rhea], and squab (pigeons up to one month old]) intended for use as human food. The Egg Products Inspection Act, as amended, provides USDA authority to inspect liquid, frozen, and dried egg products. Each of these laws contains provisions governing USDA's authority to label food products under its jurisdiction. Under the authority of the Agricultural Marketing Act of 1946 as amended, USDA's FSIS may provide voluntary inspection for buffalo, antelope, reindeer, elk, migratory waterfowl, game birds, and rabbits. This type of inspection is performed by FSIS on a fee-for-service basis. However, these meat and poultry species are still within the purview of FDA under FFDCA, whether or not inspected under the voluntary FSIS program. FDA has jurisdiction over meat products from such species in interstate commerce, even if they bear the USDA inspection mark. FDA also has jurisdiction over shell eggs. In addition, the 2008 farm bill requires that FSIS inspect and grade farmed catfish products. Meat and poultry animals and products undergo continuous (i.e., 100%) inspection, which may in turn act as a deterrent to fraud in some cases. FSIS inspects all meat and poultry animals to look for signs of disease, contamination, and other abnormal conditions, both before and after slaughter ("antemortem" and "postmortem," respectively), on a continuous basis--meaning that no animal may be slaughtered and dressed unless an inspector has examined it. One or more federal inspectors are on the line during all hours the plant is operating. Processing plants visited once every day by an FSIS inspector are considered to be under continuous inspection in keeping with the laws. Inspectors monitor operations, check sanitary conditions, examine ingredient levels and packaging, review records, verify food safety plans, and conduct statistical sampling and testing of products for pathogens and residues during their inspections. FSIS is responsible for certifying that foreign meat and poultry plants are operating under an inspection system equivalent to the U.S. system before they can export their product to the United States. Meat and poultry imports are 100% visually inspected (process-based, documentation, labeling), although physical inspections of imports may be more random. FSIS conducts evaluations of foreign meat safety programs and visits establishments to determine whether they are providing a level of safety equivalent to that of U.S. safeguards. No foreign plant can ship meat or poultry to the United States unless its country has received such an FSIS determination. Twenty-seven states operate their own meat and/or poultry inspection programs. FSIS is statutorily responsible for ensuring that the states' programs are at least equal to the federal program. Plants processing meat and poultry under state inspection can market their products only within the state. If a state chooses to discontinue its own inspection program, or if FSIS determines that it does not meet the agency's equivalency standards, FSIS must assume the responsibility for inspection if the formerly state-inspected plants are to remain in operation. FSIS also has cooperative agreements with more than two dozen states under which state inspection personnel are authorized to carry out federal inspection in meat and/or poultry plants. Products from these plants may travel in interstate commerce. CDC is responsible for (1) monitoring, identifying, and investigating foodborne disease problems to determine the contributing factors; (2) working with FDA, FSIS, National Marine Fisheries Service (NMFS), state and local public health departments, universities, and industry to develop control methods; and (3) evaluating the effect of control methods. CDC's "FoodNet" is a collaborative project with the FDA and USDA to improve data collection on foodborne illness outbreaks. FoodNet includes active surveillance of clinical microbiology laboratories to obtain a more accurate accounting of positive test results for foodborne illness; a physician survey to determine testing and laboratory practices; population surveys to identify illnesses not reported to doctors; and research studies to obtain new and more precise information about which food items or other exposures may cause diseases. FoodNet data allow CDC to have a clearer picture of the incidence and causes of foodborne illness and to establish baseline data against which to measure the success of changes in food safety programs. The Public Health Service Act (42 U.S.C. SSSS201, et seq .) provides legislative authority for CDC's food safety-related activities. Although the FDA is the primary agency responsible for ensuring the safety, wholesomeness, and proper labeling of domestic and imported seafood products, the National Marine Fisheries Service (NMFS), which is part of the U.S. Department of Commerce, conducts, on a fee-for-service basis, a voluntary seafood inspection and grading program that focuses on marketing and quality attributes of U.S. fish and shellfish. The primary legislative authority for NMFS's inspection program is the Agricultural Marketing Act of 1946, as amended (7 U.S.C. SSSS1621 et seq .). NMFS has approximately 160 seafood safety and quality inspectors, and inspection services are funded with user fees. NMFS works with FDA, which helps provide training and other technical assistance to NMFS. Under the program, NMFS inspects a reported 20% of the seafood consumed in the United States. EPA has the statutory responsibility for ensuring that the chemicals used on food crops do not endanger public health. EPA's Office of Pesticide Programs is the part of the agency that (1) registers new pesticides and determines residue levels for regulatory purposes; (2) performs special reviews of pesticides of concern; (3) reviews and evaluates all the health data on pesticides; (4) reviews data on pesticides' effects on the environment and on other species; (5) analyzes the costs and benefits of pesticide use; and (6) interacts with EPA regional offices, state regulatory counterparts, other federal agencies involved in food safety, the public, and others to keep them informed of EPA regulatory actions. The Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. SSSS136 et seq. ), and FFDCA, as amended (21 U.S.C. SSSS301 et seq. ), are the primary authorities for EPA's activities in this area. USDA's Agricultural Marketing Service (AMS) is responsible for establishing quality and marketing grades and standards for many foods (including dairy products, fruits and vegetables, livestock, meat, poultry, seafood, and shell eggs) and for certifying quality programs and conducting quality grading services. Accordingly, AMS is primarily responsible for ensuring product quality and not food safety . USDA programs establishing quality grade standards to encourage uniformity and consistency in commercial practices are provided for under the Agricultural Marketing Act of 1946 (7 U.S.C. SS1621). AMS also administers the Pesticide Data Program (PDP), a cooperative federal-state residue testing program through which it collects data on residual pesticides, herbicides, insecticides, fungicides, and growth regulators in over 50 different commodities. The pesticides and commodities to be tested each year are chosen based on EPA data needs and on information about the types and amounts foods consumed, in particular, by infants and children. Authorization for the program is under the Federal Food, Drug, and Cosmetic Act, as amended by the 1996 Food Quality Protection Act (21 U.S.C. SSSS301 et seq. ). Among the other agencies that play a role in food safety, USDA's Agricultural Research Service (ARS) performs food safety research in support of FSIS's inspection program. It has scientists working in animal disease bio-containment laboratories in Plum Island, NY, and Ames, IA. USDA's Animal and Plant Health Inspection Service (APHIS) indirectly protects the nation's food supply through programs to protect plant and animal resources from domestic and foreign pests and diseases, such as brucellosis and bovine spongiform encephalopathy (BSE, or "mad cow" disease). The Department of Homeland Security (DHS) is to coordinate many food security activities, including at U.S. borders. Historically, federal funding and staffing levels between FDA and FSIS have been disproportionate to their respective responsibilities for addressing food safety activities. Although FSIS is responsible for roughly 10%-20% of the U.S. food supply, it has received about 60% of the two agencies' combined food safety budget. Although FDA has been responsible for 80%-90% of the U.S. food supply, a few years ago it received about 40% of the combined budget for federal food safety activities ( Table 1 ). Staffing levels also have varied considerably among the two agencies: FSIS staff numbered around 9,400 FTEs in FY2010, while FDA staff working on food-related activities numbers about 3,400 FTEs. In recent years, however, the balance of overall funding for food safety between FDA and USDA has started to shift. Congressional appropriators have increased funding for FDA food activities, which more than doubled from $435.5 million in FY2005 to $987.3 million in FY2016 ( Table 1 ). Funding for FSIS remained mostly unchanged to slightly lower overall. The Food Safety Modernization Act (FSMA) also provided for additional limited funding through certain types of industry-paid user fees. FSMA--comprehensive food safety legislation enacted in the 111 th Congress--authorized additional appropriations and staff for FDA's future food safety activities. FSMA was the largest expansion of FDA's food safety authorities since the 1930s. Among its many provisions, FSMA authorized increased frequency of inspections at food facilities, tightened record-keeping requirements, extended oversight to certain farms, and mandated product recalls. It required food processing, manufacturing, shipping, and other facilities to conduct food safety plans of the most likely safety hazards and design and implement risk-based controls. It also mandated improvements to the nation's foodborne illness surveillance systems and increased scrutiny of food imports, among other provisions. FSMA did not directly address meat and poultry products under USDA's jurisdiction. Although Congress authorized appropriations when it enacted FSMA, it did not provide the funding needed for FDA to perform these activities, and FDA funding for FSMA implementation and other food safety activities has been lower than what agency officials have said is needed to fully implement the law. Previously, FDA reported that an additional $400 million to $450 million per year above the FY2012 base is needed to fully implement FSMA. The enacted FY2016 Agriculture appropriation provided for a $104.5 million increase in budget authority for FDA's food safety activities, including FSMA implementation. For additional information, see CRS Report R44309, FY2016 Appropriations: Selected Federal Food Safety Agencies . Funding levels specific to food safety responsibilities at other federal and state agencies are not readily available. Although FDA staff working on food-related activities has increased, actual staffing levels remain below that mandated in FSMA. Among its many provisions, FSMA mandated an increase in the number of food safety inspectors within FDA and expanded the agency's authority to increase inspection of domestic and foreign food facilities. FSMA states a "goal of not fewer than ... 5,000 staff members in fiscal year 2014." Instead, FDA reports actual staffing levels at 3,700 FTEs in FY2015 ( Table 1 ). FSIS staff number about 8,900 FTEs, a reduction from that in previous years. The discrepancy between the number of FDA and FSIS inspectors is, in part, attributable to differences in how each agency fulfills its respective inspection mandate. Whereas FDA inspection involves primarily review and sampling, FSIS personnel inspect all meat and poultry animals at slaughter on a continuous basis, requiring that at least one federal inspector is on the line during all hours the plant is operating. Processing inspection does not require an FSIS inspector to remain constantly on the production line or to inspect every item. Instead, inspectors are on site daily to monitor the plant's adherence to the standards for sanitary conditions, ingredient levels, and packaging and to conduct statistical sampling and testing of products. Because all plants are visited daily, processing inspection is also considered to be continuous. As of February 2016, a reported more than 300,000 domestic and foreign food facilities were registered with the agency and are potentially subject to inspection FDA reports. Of these, about 88,000 facilities are domestic (U.S.) registrations, and 212,000 facilities are foreign registrations. Registration of domestic and foreign food facilities is required under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 ("Bioterrorism Act," P.L. 107-188 ). Most recent available information for FY2012 indicate that FDA and the states under contract with FDA inspected 24,462 domestic food facilities and 1,342 foreign food facilities ( Table 2 ). Data compiled by FDA indicate that, on average, between 10% and 30% of all domestic facilities are inspected by FDA annually, most of which are considered "high-risk" facilities. Estimates of unannounced compliance inspections of domestic establishments by FDA officials range from once every five years to once every 10 years, on average, although the agency claims to visit about 6,000 so-called "high-risk" facilities on an annual basis. In general, FDA relies on notifications from within the industry or from other federal or state inspection personnel to alert it to situations calling for increased inspection. FDA inspection rates of imported foods are much lower, with a reported roughly 2% of all food import lines being physically examined by FDA. Previously, GAO reported that FDA inspections covered only about 1% of the food imported under its jurisdiction. Although FDA is not able to physically inspect a large percentage of food entering the United States, FDA electronically screens all import entries using an automated system known as Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting (PREDICT) information technology system. In addition, FDA can issue import bulletins to signal field inspectors to pay special attention to a particular product, or a range of products from a particular producer, shipper, or importer. The number of regulated meat and poultry facilities under USDA's jurisdiction is much lower and has remained mostly stable over time ( Table 3 ). Much of the agency's work is conducted in cooperation with federal, state, and municipal agencies, as well as private industry. FSIS currently conducts inspections in 6,389 establishments. This compares to 2002, when USDA reported that it conducted inspections in about 6,000 establishments. This total includes Talmadge-Aiken plants, wherein state inspectors perform inspections under federal inspectors' supervision. There were 350 Talmadge-Aiken plants in 2015, up from 235 in 2002. Of the total number of meat, poultry, and egg establishments under FSIS jurisdiction, about 1,100 plants either slaughter or slaughter and process livestock or poultry. More than 4,000 facilities only process meat and poultry, and about 80 process egg products. FSIS also reinspects imported meat, poultry, and egg products at about 140 import reinspection facilities. In the Senate, food safety issues are under the jurisdiction of the Committees on Agriculture, Nutrition, and Forestry; Homeland Security and Governmental Affairs; and Health, Education, Labor, and Pensions. In the House, various food safety activities fall under the jurisdiction of the Committees on Agriculture; Energy and Commerce; Oversight and Government Reform; and Science, Space, and Technology. Agriculture subcommittees of the House and Senate Appropriations Committees set funding and provide oversight of the major agencies that carry out food safety policies. In general, the House and Senate Agriculture Committees maintain jurisdiction over USDA's meat and poultry inspection programs and also other food-safety-related programs administered by other USDA agencies ( see text box below ). One exception involves certain nutrition programs, such as the National School Lunch Program and certain other institutional food service programs administered by USDA's Food and Nutrition Service (FNS), where the committees of jurisdiction are the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Education and the Workforce. FDA-regulated foods and other products generally fall under the jurisdiction of the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions. Under FSMA, the separate authorities between FDA and USDA for various foods were explicitly maintained in the enacted law. However, identifying committees of jurisdiction for specific laws, programs, and federal agencies is not straightforward and further complicated by split jurisdiction between FDA and USDA in the case of some foods due to documented fragmentation, overlap, and duplication among the agencies responsible for administering the laws and programs governing certain foods. Appendix A. Major Federal Food Safety Agencies and Selected Laws Appendix B. Selected Comparison of FSIS and FDA Responsibilities

Numerous federal, state, and local agencies share responsibilities for regulating the safety of the U.S. food supply. Federal responsibility for food safety rests primarily with the Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA). FDA, an agency of the Department of Health and Human Services, is responsible for ensuring the safety of all domestic and imported food products (except for most meats and poultry). FDA also has oversight of all seafood, fish, and shellfish products. USDA's Food Safety and Inspection Service (FSIS) regulates most meat and poultry and some egg products. The Government Accountability Office (GAO) has identified as many as 15 federal agencies, including FDA and FSIS, as collectively administering at least 30 laws related to food safety. State and local food safety authorities collaborate with federal agencies for inspection and other food safety functions, and they regulate retail food establishments. The combined efforts of the food industry and government regulatory agencies often are credited with making the U.S. food supply among the safest in the world. However, critics view this system as lacking the organization, regulatory tools, and resources to adequately combat foodborne illness--as evidenced by a series of widely publicized food safety problems, including concerns about adulterated food and food ingredient imports, and illnesses linked to various types of fresh produce, to peanut products, and to some meat and poultry products. Some critics also note that the organizational complexity of the U.S. food safety system as well as trends in U.S. food markets--for example, increasing imports as a share of U.S. food consumptions and increasing consumption of fresh, often unprocessed, foods--pose ongoing challenges to ensuring food safety. Over the years, GAO has published a series of reports highlighting how food safety oversight in the United States is fragmented and recommending broad restructuring of the nation's food safety system. Similar observations are noted in a series of food safety studies by the National Research Council (NRC) and the Institute of Medicine (IOM) that recommend that the core federal food safety responsibilities should reside within a single entity/agency, with a unified administrative structure, a clear mandate, a dedicated budget, and full responsibility for oversight of the entire U.S. food supply. The 111th Congress passed comprehensive food safety legislation with the FDA Food Safety Modernization Act (FSMA, P.L. 111-353). FSMA is the largest expansion of FDA's food safety authorities since the 1930s. Although numerous agencies share responsibility for regulating food safety, FSMA focused on foods regulated by FDA, amended FDA's existing structure and authorities, and did not directly address meat and poultry products under USDA's jurisdiction. Beyond these changes, some in Congress continue to push for additional policy reforms to address other perceived concerns about the safety of the U.S. food supply.

On September 22, 2010, President Obama signed the Presidential Policy Directive on Global Development. The directive called for the elevation of foreign development assistance as a national priority and outlined an integrated approach to development, diplomacy, and national security. The Global Climate Change Initiative (GCCI)--one of the three main pillars to the 2010 directive --aims to integrate climate change considerations into relevant foreign assistance through a range of bilateral, multilateral, and private mechanisms to promote sustainable and resilient societies, foster low-carbon economic growth, and reduce greenhouse gas emissions from deforestation and land degradation. The GCCI is divided into three main programmatic initiatives, or categories: (1) adaptation assistance, (2) clean energy assistance, and (3) sustainable landscapes assistance. Adaptation programs aim to assist low-income countries with reducing their vulnerability to climate change impacts and building climate resilience. Bilateral and regional programs at the Department of State and USAID target the more vulnerable countries in Africa, Asia, and Latin America and strive to address climate risks in areas including infrastructure, agriculture, health, and water services; to develop capacity for countries to use the best science and analysis for decision making; and to promote sound governance to carry out these decisions. Multilateral initiatives supported by the United States include the Least Developed Country Fund and the Special Climate Change Fund, which focus on climate resilience and food security provisions in countries with the greatest needs; and the Strategic Climate Fund: Pilot Program for Climate Resilience, which is tasked with coordinating comprehensive strategies in several of the most vulnerable countries to support actions that respond to the potential risks of a changing climate. Clean energy programs aim to reduce greenhouse gas emissions from energy generation and energy use by accelerating the deployment of clean energy technologies, policies, and practices. The United States delivers much of its assistance for clean energy deployment through multilateral trust funds. These funds are primarily housed in international financial institutions (e.g., the World Bank); are currently supported by the financial contributions of donor country governments; and provide financial assistance for projects implemented by a variety of organizations, including U.N. agencies, multilateral development banks, nongovernmental organizations, and national institutions. These funds take advantage of existing large-scale greenhouse gas reduction opportunities and establish investment channels for larger private sector financing. They include the Clean Technology Fund, which aims to spur large-scale clean energy investments in lower-income countries with rapidly growing emissions; the Global Environment Facility, which provides incremental funding for energy and infrastructure projects that support global environmental benefits; and the Strategic Climate Fund: Program for Scaling-Up Renewable Energy in Low Income Countries, which endeavors to assist the poorest countries expand energy access and stimulate economic growth through the scaled-up deployment of renewable energy strategies. Bilateral efforts at the Department of State and U.S. Agency for International Development (USAID) seek to complement the multilateral investments by helping to shape development policy and regulatory environments in the recipient countries. Sustainable landscape programs aim to reduce greenhouse gas emissions from deforestation and forest degradation. Bilateral and regional programs at the Department of State and USAID support country-driven policies for forest governance, forest cover and land use change monitoring systems, law-based resource management and land tenure, and on-the-ground efforts to halt deforestation and foster sustainable forest-based livelihoods. Multilateral initiatives include the Strategic Climate Fund: Forest Investment Program, which tries to address the circumstances that lead to deforestation and increased greenhouse gas emissions in select lower-income countries by improving regulation and enforcement, mobilizing private financing, and securing the social and economic benefits of sound forest management; and the Global Environment Facility, which provides incremental funding for projects that support global environmental benefits such as biodiversity and sustainable land use. The recently launched United Nations Framework Convention on Climate Change (UNFCCC) Green Climate Fund, when capitalized, would support programming in all three programmatic initiatives. The Global Climate Change Initiative is funded through programs at the Department of State, the Department of the Treasury, and USAID (i.e., GCCI "core" agencies). Funds for these programs are appropriated in the Administration's Executive Budget, the International Affairs Function 150 account, for State, Foreign Operations, and Related Programs. Recent trends in GCCI budget authority have seen it fluctuate between $820 million and $950 million since FY2010, and it accounts for less than 2% of total programming in the Function 150 account. Recent budget authority for the GCCI was reported as $945 million in FY2010, $819 million in FY2011, $857 million in FY2012, $840 million in FY2013, and $834 million in FY2014. Funding for FY2015 has yet to be fully reported by agencies. The Administration's FY2016 GCCI budget request is for $1,290 million, including $500 million for the UNFCCC Green Climate Fund. Some additional funds for international climate change financing flow through programs at complementary agencies within the federal government (e.g., the Department of Energy, the Environmental Protection Agency, the Department of Agriculture); however, these allocations are defined outside the scope of the GCCI and are not included in this report. Budget authority for GCCI programming from FY2010 to FY2016 is presented by agency and account in Table A-1 . Congress is responsible for several activities in regard to the GCCI, including (1) authorizing periodic appropriations for federal agency programs and multilateral fund contributions, (2) enacting those appropriations, (3) providing guidance to the agencies, and (4) overseeing U.S. interests in the programs. Congressional committees of jurisdiction for international climate change programs at the Department of State, the Department of the Treasury, and USAID include the following: U.S. House of Representatives Committee on Foreign Affairs, U.S. House of Representatives Committee on Financial Services, U.S. House of Representatives Committee on Appropriations, U.S. Senate Committee on Foreign Relations, and U.S. Senate Committee on Appropriations. H.R. 3288 , the Consolidated Appropriations Act, 2010, was enacted December 16, 2009, as P.L. 111-117 . It included appropriations for the Department of State, Foreign Operations, and Related Programs (Division F) that support Global Climate Change Initiative programming. Many GCCI activities are funded by allocations at the sub-account level, and were left undefined in P.L. 111-117 . Allocations for FY2010 GCCI sub-account programmatic activities in this report are as reported by agencies on the U.S. Department of State's "Foreign Assistance" website. Appropriations enacted in P.L. 111-117 related to GCCI activities include the following: $86.5 million for the Global Environment Facility (of which the U.S. Department of State estimates that $37 million was allocated toward projects related to global climate change activities, with the remainder allocated to projects related to biodiversity, international waters, ozone protection, organic pollutants, etc.); $300.0 million for the Clean Technology Fund; $75.0 million for the Strategic Climate Fund (including the Pilot Program for Climate Resilience and the Forest Investment Program); and larger account level appropriations at the Department of State, USAID, and the Department of the Treasury, including "Development Assistance" at $2,520 million; "Assistance for Europe, Eurasia and Central Asia" at $741.6 million; "Economic Support Fund" at $6,344 million (with another $2,490 million enacted in FY2010 Supplemental Appropriations ( H.R. 4899 ; P.L. 111-212 ); "Department of the Treasury, Debt Restructuring" at $60 million; and "International Organizations and Programs" at $394 million. From these larger accounts, agencies reported $533 million in sub-account level bilateral and regional development programming allocated for GCCI activities. See the Appendix for a breakdown of the FY2010 budget authority. H.R. 1473 , the Department of Defense and Full-Year Continuing Appropriations Act, 2011, was enacted April 15, 2011, as P.L. 112-10 . It included appropriations for the Department of State, Foreign Operations, and Related Programs (Title IX) that support Global Climate Change Initiative programming. Many GCCI activities are funded by allocations at the sub-account level, and were left undefined in P.L. 112-10 . Allocations for FY2011 GCCI sub-account programmatic activities in this report are as reported by agencies on the U.S. Department of State's "Foreign Assistance" website. Appropriations enacted in P.L. 112-10 related to GCCI activities include the following: $89.8 million for the Global Environment Facility (of which the Global Environment Facility reports that approximately 50% is allocated toward projects related to global climate change activities, with the remainder allocated to projects related to biodiversity, international waters, ozone protection, organic pollutants, etc.); $184.6 million for the Clean Technology Fund; $49.9 million for the Strategic Climate Fund (including the Pilot Program for Climate Resilience, the Forest Investment Program, and the Program for Scaling-Up Renewable Energy in Low Income Countries); and larger account level appropriations at the Department of State, USAID, and the Department of the Treasury, including "Development Assistance" at $2,520 million; "Assistance for Europe, Eurasia and Central Asia" at $696 million; "Economic Support Fund" at $5,946 million; "Department of the Treasury, Debt Restructuring" at $50 million; and "International Organizations and Programs" at $354 million. From these larger accounts, agencies reported $539 million in sub-account level bilateral and regional development programming allocated for GCCI activities. See the Appendix for a breakdown of the FY2011 budget authority. H.R. 2055 , the Consolidated Appropriations Act, 2012, was enacted December 23, 2011, as P.L. 112-74 . It included appropriations for the Department of State, Foreign Operations, and Related Programs (Division I) that support Global Climate Change Initiative programming. Many GCCI activities are funded by allocations at the sub-account level, and were left undefined in P.L. 112-74 . Allocations for FY2012 GCCI sub-account programmatic activities in this report are as reported by agencies on the Department of State's "Foreign Assistance" website. Appropriations enacted in P.L. 112-74 related to GCCI activities include the following: $89.8 million for the Global Environment Facility (of which the Global Environment Facility reports that approximately 50% is allocated toward projects related to global climate change activities, with the remainder allocated to projects related to biodiversity, international waters, ozone protection, organic pollutants, etc.); $184.6 million for the Clean Technology Fund; $49.9 million for the Strategic Climate Fund (including the Pilot Program for Climate Resilience, the Forest Investment Program, and the Program for Scaling-Up Renewable Energy in Low Income Countries); larger account level appropriations at the Department of State, USAID, and the Department of the Treasury, including "Development Assistance" at $2,520 million; "Assistance for Europe, Eurasia and Central Asia" at $627 million; "Economic Support Fund" at $5,763 million; "Department of the Treasury, Debt Restructuring" at $12 million; and "International Organizations and Programs" at $349 million. From these larger accounts, agencies reported $493 million in sub-account level bilateral and regional development programming allocated for GCCI activities; and provisions for funding transfers were included, such that in consultation with the Secretary of the Treasury, the Secretary of State may transfer up to $200 million of the funds made available under the "Economic Support Fund" to funds appropriated under the headings ''Multilateral Assistance, Funds Appropriated to the President, International Financial Institutions'' for additional payments to such institutions, facilities, and funds. Using these provisions, the Department of State transferred funds to the Department of the Treasury, which allocated $30 million to the Global Environment Facility (of which $15 million is considered GCCI funding), $45 million to the Clean Technology Fund, and $25 million to the Strategic Climate Fund for FY2012. See the Appendix for a breakdown of the FY2012 budget authority. H.R. 933 , the Consolidated and Further Continuing Appropriations Act, 2013, was enacted March 26, 2013, as P.L. 113-6 . Under P.L. 113-6 , appropriations for the Department of State, Foreign Operations, and Related Programs (Division F, Title VII) that support Global Climate Change Initiative programming were funded through a continuing resolution at the same level as in FY2012, with several changes specified as provisions in the legislation. FY2013-enacted account level estimates were subject to the budget sequestration process as established by the Budget Control Act of 2011 ( P.L. 112-25 ) and the American Taxpayer Relief Act ( P.L. 112-240 ). The enacted State-Foreign Operations funding for FY2013 was reduced by approximately 5% through sequestration, and those reductions were applied at the program, project, and activity level. As in prior years, many GCCI activities are funded by allocations at the sub-account level, and were left undefined in P.L. 113-6 . Allocations for FY2013 GCCI sub-account programmatic activities in this report are as reported by agencies in the U.S. Office of Management and Budget, FY2014 Federal Climate Change Expenditures Report to Congress , August 2013. This reporting is minus the reductions pursuant to the Budget Control Act of 2011 ( P.L. 112-25 ) sequestration order, and accounting for any known and applicable reprogramming, transfers, or other related adjustments. Appropriations enacted in P.L. 113-6 related to GCCI activities (post-sequestration and rescissions estimates) include the following: $124.84 million for the Global Environment Facility (of which the Global Environment Facility reports that approximately 50% is allocated toward projects related to global climate change activities, with the remainder allocated to projects related to biodiversity, international waters, ozone protection, organic pollutants, etc.); $175.28 million for the Clean Technology Fund; $47.37 million for the Strategic Climate Fund (including the Pilot Program for Climate Resilience, the Forest Investment Program, and the Program for Scaling-Up Renewable Energy in Low Income Countries); larger account level appropriations at the Department of State, USAID, and the Department of the Treasury, including "Development Assistance" at $2,718 million; "Economic Support Fund" at $5,583 million; "Department of the Treasury, Debt Restructuring" at $11 million; and "International Organizations and Programs" at $331 million. From these larger accounts, agencies reported $472 million in sub-account level bilateral and regional development programming allocated for GCCI activities; and provisions for funding transfers, as they existed in P.L. 112-74 , were retained in P.L. 113-6 . Using these provisions, the Department of State transferred funds to the Department of the Treasury, which allocated $20.9 million to the Clean Technology Fund and $62.8 million to the Strategic Climate Fund for FY2013. See the Appendix for a breakdown of the FY2013 budget authority. H.R. 3547 , the Consolidated Appropriations Act, 2014, was enacted January 17, 2014, as P.L. 113-76 . It included appropriations for the Department of State, Foreign Operations, and Related Programs (Division K) that support Global Climate Change Initiative programming. Many GCCI activities are funded by allocations at the sub-account level, and were left undefined in P.L. 113-76 . Detailed FY2014 funding has yet to be fully reported by the agencies. Appropriations enacted in P.L. 113-76 related to GCCI activities include the following: $143.75 million for the Global Environment Facility (of which the Global Environment Facility reports that approximately 50% is allocated toward projects related to global climate change activities, with the remainder allocated to projects related to biodiversity, international waters, ozone protection, organic pollutants, etc.); $184.63 million for the Clean Technology Fund; $49.90 million for the Strategic Climate Fund (including the Pilot Program for Climate Resilience, the Forest Investment Program, and the Program for Scaling-Up Renewable Energy in Low Income Countries); larger account level appropriations at the Department of State, USAID, and the Department of the Treasury, including "Development Assistance" at $2,705 million, "Economic Support Fund" at $4,640 million, and "International Organizations and Programs" at $334 million. From these larger accounts, agencies have yet to report funding for sub-account level bilateral and regional development programming allocated for GCCI activities; and provisions for funding transfers were included, such that in consultation with the Secretary of the Treasury, the Secretary of State may transfer funds appropriated under the heading "Economic Support Fund" to funds appropriated under the heading "Multilateral Assistance, International Financial Institutions." Using these provisions, the Department of State transferred funds to the Department of the Treasury, which allocated $25.0 million to the Clean Technology Fund and $25.0 million to the Strategic Climate Fund for FY2014. See the Appendix for a breakdown of the FY2014 proposed budget authority. H.R. 83 , the Consolidated and Further Continuing Appropriations Act, 2015, was enacted December 16, 2014, as P.L. 113-235 . It included appropriations for the Department of State, Foreign Operations, and Related Programs (Division J) that support Global Climate Change Initiative programming. Many GCCI activities are funded by allocations at the sub-account level, and were left undefined in P.L. 113-235 . Detailed FY2015 funding has yet to be fully reported by the agencies. Appropriations enacted in P.L. 113-235 related to GCCI activities include the following: $136.56 million for the Global Environment Facility (of which the Global Environment Facility reports that approximately 50% is allocated toward projects related to global climate change activities, with the remainder allocated to projects related to biodiversity, international waters, ozone protection, organic pollutants, etc.); $184.63 million for the Clean Technology Fund; $49.90 million for the Strategic Climate Fund (including the Pilot Program for Climate Resilience, the Forest Investment Program, and the Program for Scaling-Up Renewable Energy in Low Income Countries); larger account level appropriations at the Department of State, USAID, and the Department of the Treasury, including "Development Assistance" at $2,507 million, "Economic Support Fund" at $5,459 million, and "International Organizations and Programs" at $344 million. From these larger accounts, agencies have yet to report funding for sub-account level bilateral and regional development programming allocated for GCCI activities; and provisions for funding transfers were included, such that in consultation with the Secretary of the Treasury, the Secretary of State may transfer funds appropriated under the heading "Economic Support Fund" to funds appropriated under the heading "Multilateral Assistance, International Financial Institutions." Using these provisions, the Department of State transferred funds to the Department of the Treasury, which allocated $16.7 million to the Clean Technology Fund and $13.3 million to the Strategic Climate Fund during FY2015. See the Appendix for a breakdown of the FY2015 proposed budget authority. The President's FY2016 budget request for the Global Climate Change Initiative is $1,289.6 million, including the following: $348.5 million for international climate change programming at USAID; $459.8 million for international climate change programming at the Department of State, including $350.0 million for the Green Climate Fund, $11.7 million for the UNFCCC/IPCC, and $25.5 million for the Montreal Protocol; and $481.3 million for international climate change programming at the Department of the Treasury, including $150.0 million for the Green Climate Fund, $168.3 million for the Global Environment Facility (of which approximately 60% is considered GCCI funding), $170.7 million for the Clean Technology Fund, and $59.6 million for the Strategic Climate Fund. The requests for the Clean Technology Fund and the Strategic Climate Fund would fulfill the joint $2 billion pledge made by the United States in 2008. See the Appendix for a breakdown of the FY2016 request. As Congress considers potential authorizations and/or appropriations for initiatives administered through the Department of State, the Department of the Treasury, USAID, and other agencies with international programs, it may have questions concerning the purpose, direction, efficiency, and effectiveness of U.S. agency initiatives and current bilateral and multilateral programs that address global climate change. Some issues that may raise concerns over providing assistance include the following: F iscal Constraints. Budget constraints may lead to questions about sustaining high levels of support for international development assistance in general, and international climate change assistance in particular. The burden is exacerbated during times of economic downturn, when the federal government is hard-pressed to generate fiscal resources to adequately address domestic challenges and maintain basic levels of public services and quality of life. Some have suggested that retaining available funds for immediate domestic priorities, such as fostering renewed economic growth and creating jobs, should take precedence over global concerns for which many Americans feel less urgency and responsibility. Potential for Misuse. National and international institutions that dispense financial assistance have been criticized on occasion for inefficient and bloated bureaucracies; their lack of transparency about project procurement practices and operating costs; and the proportion of their funds misused or lost through instances of graft, corruption, and other political inefficiencies. Some suggest revisiting operational guidance of these institutions before further appropriations are made. Uncertain Results . Questions remain regarding the overall effectiveness of international financial assistance in spurring economic development and reform in lower-income countries, and, more specifically, in addressing issues of climate change and the environment. Many studies have examined the effects of international assistance provided to lower-income countries, including both bilateral and multilateral mechanisms, and have returned mixed results, making it difficult to reach firm conclusions that would support or oppose continued contributions. Uncertainties in Climate Science . Prevailing scientific research on the current and future impacts of greenhouse gas emissions on the global climate exhibits varying degrees of analytical uncertainty. The lack of definitiveness in some data and in certain model projections has been offered by some as a reason to postpone and/or reconsider both domestic and international climate change assistance policies and programs. Some issues that may support providing assistance include the following: Commercial Interests. Some maintain that international climate change assistance benefits U.S. businesses, as support for low-emission economic growth may increase trade, commerce, and economic activity in the global marketplace for U.S. goods and services. Increased assistance may allow some U.S. industries to make competitive inroads into rapidly expanding markets, improve the advancement and commercialization of U.S. technologies, mobilize greater investment in related domestic sectors, and enhance job creation in the United States. Decreased funding may cede American influence in global markets to other economic powers still engaged with lower-income countries on environmental and natural resource issues (e.g., the European Union, China). Investment Efficiencies. Some argue that the costs of responding to tomorrow's climate-related catastrophes, instabilities, conflicts, and technological needs may be significantly higher than the costs of preventing them today. Some economists note that lower-income countries account for nearly all of the recent growth in global emissions and represent the cheapest near-term opportunity to mitigate GHG pollution as part of a cost-effective global solution. Natural Disaster Preparedness . Some claim that international climate change assistance is a means to support natural disaster preparedness around the globe. Assistance for adaptation activities to help "climate-proof" developing countries' infrastructure and other sectors may help avoid future capital and other losses; minimize the redirection of resources to ad hoc disaster response and urgent humanitarian needs; and avoid chronic humanitarian crises, such as food shortages, particularly for the resource poor in the least developed countries. National Security. Some defend international climate change assistance as a way to address and mitigate risks to national security. According to a 2008 National Intelligence Assessment, the impacts of global climate change may worsen problems of poverty, social tensions, environmental degradation, and weak political institutions across the developing world. Some see international climate change assistance as a means to help make lower-income countries less susceptible to these threats, for the benefit of both the country and the security interests of the United States. Internatio nal Leadership. Some see the promotion of international climate change assistance to lower-income countries as a method through which to increase U.S. leadership in global environmental issues. Through such leadership, the United States may be able to influence and set important international economic and environmental policies, practices, and standards.

The United States supports international financial assistance for global climate change initiatives in developing countries. Under the Obama Administration, this assistance has been articulated primarily as the Global Climate Change Initiative (GCCI), a platform within the President's 2010 Policy Directive on Global Development. The GCCI aims to integrate climate change considerations into U.S. foreign assistance through a range of bilateral, multilateral, and private sector mechanisms to promote sustainable and climate-resilient societies, foster low-carbon economic growth, and reduce greenhouse gas emissions from deforestation and land degradation. The GCCI is implemented through programs at three "core" agencies: the Department of State, the Department of the Treasury, and the U.S. Agency for International Development (USAID). Most GCCI activities at USAID are implemented through the agency's bilateral development assistance programs. Many of the GCCI activities at the Department of State and the Department of the Treasury are implemented through international organizations, including the United Nations Framework Convention on Climate Change's Least Developed Country Fund and Special Climate Change Fund, as well as multilateral financial institutions such as the Global Environment Facility, the Clean Technology Fund, and the Strategic Climate Fund. The GCCI is funded through the Administration's Executive Budget, Function 150 account, for State, Foreign Operations, and Related Programs. Congress is responsible for several activities in regard to the GCCI, including (1) authorizing periodic appropriations for federal agency programs and multilateral fund contributions, (2) enacting those appropriations, (3) providing guidance to the agencies, and (4) overseeing U.S. interests in the programs and the multilateral funds. Recent budget authority for the GCCI was $945 million in FY2010, $819 million in FY2011, $857 million in FY2012, $840 million in FY2013, and $834 million in FY2014. Funding for FY2015 has yet to be fully reported by agencies. Funding has been enacted through legislation including the Consolidated Appropriations Act, 2010 (H.R. 3288; P.L. 111-117); the Supplemental Appropriations Act, 2010 (H.R. 4899; P.L. 111-212); the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (H.R. 1473; P.L. 112-10); the Consolidated Appropriations Act, 2012 (H.R. 2055; P.L. 112-74); the Consolidated and Further Continuing Appropriations Act, 2013 (H.R. 933; P.L. 113-6); the Consolidated Appropriations Act, 2014 (H.R. 3547; P.L. 113-76); and the Consolidated and Further Continuing Appropriations Act, 2015 (H.R. 83; P.L. 113-235). The Administration's FY2016 GCCI budget request is for $1,290 million, including $500 million for the recently launched United Nations Framework Convention on Climate Change (UNFCCC) Green Climate Fund. Congressional committees of jurisdiction over the GCCI include the U.S. House of Representatives Committees on Foreign Affairs, Financial Services, and Appropriations, and the U.S. Senate Committees on Foreign Relations and Appropriations. As Congress considers potential authorizations and/or appropriations for activities administered through the GCCI, it may have questions concerning U.S. agency initiatives and current bilateral and multilateral programs that address global climate change. Some potential concerns may include cost, purpose, direction, efficiency, and effectiveness, as well as the GCCI's relationship to industry, investment, humanitarian efforts, national security, and international leadership. This report serves as a brief overview of the GCCI and its structure, intents, and funding history.

Nearly 300,000 federal employees are presently in pay systems that attempt to link pay increases to job performance--which arguably may be defined as how effectively, efficiently, or thoroughly one performs his or her job. These pay systems vary considerably in their design, implementation, and outcomes. All of them, however, represent attempts to create a more productive and motivated federal workforce by linking performance to promotions, pay increases, or one-time bonuses. A basic challenge with such arrangements, whether used in the private or the public sector, is arriving at credible and objective performance measures. In addition, while the private sector is ultimately concerned that employee performance be of such effectiveness that it contributes to the profits of a business, the federal government has other objectives to which employee performance is expected to contribute--such as the efficient, economical, and effective provision of services to those who qualify for, and are otherwise entitled to, them. Diverse considerations come to play when attempting to attract and retain the most effective federal employees--pay among them. Departments and agencies that enter into a performance-based pay system attempt to provide managers flexibility in hiring and awarding pay raises to assist them in recruiting new talent and adequately compensating existing talent. Before rewards for good performance can be provided, however, a fair and objective performance evaluation system must be created. Good performance management, as one group of authors has observed, "should be an ongoing, interactive process designed to enhance employee capability and facilitate productivity." Performance appraisal, on the other hand, measures "an employee's contribution to the organization during a specified period of time," and is defined in 5 C.F.R. SS 430.203 as "the process under which performance is reviewed and evaluated." Performance management is ongoing, while performance appraisal is an event--a single moment of assessing completed job performance. Because appraisals are inherently reflections on the past, some public administration experts suggest not using them. Others point out, however, that effective appraisal criteria can help align employee performance with organizational goals, and help create a more satisfied and effective workforce by offering feedback and setting attainable goals. Ineffective criteria can prompt conflict within an organization and lead to resentment and competition among workers. Performance appraisals, therefore, should be precise and assist managers in ongoing performance management efforts. Federal employees who undergo performance appraisals are often given a performance plan, or expectations of their performance, at the beginning of their appraisal cycle. The performance plan may include both critical and non-critical performance elements, which are defined in the Code of Federal Regulations. Critical element means a work assignment or responsibility of such importance that unacceptable performance on the element would result in a determination that an employee's overall performance is unacceptable. Non-critical element means a dimension or aspect of individual, team, or organizational performance, exclusive of a critical element, that is used in assigning a summary level. Such elements may include, but are not limited to, objectives, goals, program plans, work plans, and other means of expressing expected performance. At the end of the appraisal cycle, a rating official and an employee may meet for a performance evaluation, or performance rating. An employee may have an unlimited number of critical and non-critical criteria on which he or she is measured. The appraisal may be written as a narrative or as a collection of short statements, or an employee may be assessed on a nominal or numeric rating scale. The National Credit Union Administration (NCUA), for example, rates employees on roughly five performance criteria. Each criterion has a five-tier scale that ranges from "Exceptional" to "Unsatisfactory." An appraisal system, according to Fisher et al., should hold employees accountable for results that are within their control and "measure important job characteristics (relevancy) and be free from extraneous or contaminating influences; it should also encompass the whole job (not be deficient)." Moreover, the evaluation assessment should be tested to ensure that two managers evaluating the same employee create similar ratings. This test for evaluation bias, called an "inter-rater reliability test," is essential for establishing employee trust in the assessment's equity and fairness. The system must also affect all employees--regardless of race, gender, age, ethnicity, or sexual orientation--equally. Even systems that indirectly affect one group more negatively than another may face challenge. For example, in 2007, an impartial mediator determined that the pay system at the Securities and Exchange Commission (SEC) unfairly hindered the advancement and pay increases of African American employees and employees over the age of 40. On October 6, 2008, the SEC agreed to pay $2.7 million to affected employees. The SEC also agreed to adjust the current salaries of the employees who were adversely affected by the merit pay system. When the pay system was found to be unintentionally biased, the commission "temporarily" separated the performance appraisal system from employee pay. SEC is currently working with employees and the National Treasury Employees Union--which represented employees affected by the previous merit-based system--to create a new performance-based pay system. Employers must also choose what they should measure to ascertain how well employees have performed: employee traits (loyalty, ability to communicate, cooperativeness); employee behaviors (greeting customers, ability to explain complicated concepts, filling out forms properly); or results (number of units produced, number of units rejected, number of days absent). Each type of rating system has strengths and weaknesses. Ratings of employees' traits may indicate employees whose personalities are best suited to the position, but may not accurately measure effective performance. Rating an employee's behavior may capture how the employee does his or her job, but may fail to measure whether the behavior leads to effective job outcomes. Finally, measuring results may determine whether an employee completes assigned tasks, but also may create a work atmosphere in which employees attempt to acquire "results at all cost [sic]." In performance appraisals, employers determine which criteria are critical. The Office of Personnel Management (OPM) also suggests that criteria be "specific," and clearly linked to overall organizational goals. To develop specific measure(s) for each element, you must determine how you would measure the quantity, quality, timeliness, and/or cost-effectiveness of the element. If it can be measured with numbers, clearly define those numbers. If performance only can be described (i.e., observed and verified), clarify who would be the best judge to appraise the work and what factors they [sic] would look for. An organization also must decide whether the appraisal criteria will be standardized across the department or agency or if it will include individualized measures specifically tailored to each employee. Standardized criteria allow all employees to be evaluated on a common set of goals, and may facilitate a clearer link between criteria and organizational mission. Employees can assume that standardized measures are important to the organization because the measures are included agency wide. On the other hand, individualized criteria can allow the rating official to capture unique job performance elements that may be essential to the organization, but are not directly linked to the agency's mission and, therefore, may not be captured by a standardized appraisal. According to U.S. Merit Systems Protection Board, "functions within an organization may be so diverse that it becomes appropriate in many organizations" to use individual appraisal criteria. Involving employees in all parts of performance appraisals can create a system that is more trusted and can better motivate employees and "help them understand the goals of the organization, what needs to be done, why it needs to be done, and how well it should be done." Currently, most federal agencies with performance-based pay systems encourage employees to speak with their managers about their rating criteria, but very few agencies require employee input. At the end of an appraisal year, an employee may be given the opportunity to submit a self-appraisal or respond to his or her rater's appraisal. Employees who are involved in the process usually are more satisfied with it than those who are not permitted to add input. Employers also must determine whether peers, subordinates, customers, or other employee supervisors are permitted to add input to evaluations. Requiring peer input may offer rating officials additional insight into an employee's performance, but each additional assessment also carries drawbacks that could contaminate the appraisal. Peers may not want to rate one another because they may be wary of making themselves seem inferior to those whom they rate, or they may not want to jeopardize workplace cooperation by submitting a poor rating. A subordinate may have an incentive to inflate the rating score of his or her supervisor if he or she believes the supervisor will know who submitted the evaluation. By allowing additional assessments, rating officials may cede some of their authority in making decisions about an employee's performance and, therefore, may lose some of the flexibilities in rate-of-pay decisions that performance-based systems are meant to increase. Employers must determine whether to evaluate employees by comparing across colleagues or based on set performance criteria. Employers may rank their employees comparatively, create comparative forced distributions (in which "the evaluator has to place a certain percentage of employees in each of several performance categories"), or use set standards on which to evaluate each employee individually. While comparative evaluations can be performed quickly and inexpensively, they do not allow managers to determine "whether the top-ranked employee in a group is a lot or just a little better than the second-ranked person," according to Fisher et al. Moreover, comparative rankings make cross-working-group or organization-wide comparisons nearly impossible. Employees may not trust a system in which their ratings cannot be replicated across managers (inter-rater reliability). Finally, some critics have noted that comparative ratings may generate a competitive workplace, rather than foster teamwork, because employees are competing against one another for ratings. Once performance appraisal criteria are established, both managers and employees must be trained in how to use the system. Managers "can be taught how to reduce rating errors," such as leniency (awarding more positive ratings than deserved), severity (awarding more unfavorable ratings than deserved), central tendency (rating all employees near the midpoint of the performance scale), and halo errors (allowing feelings about the individual to affect positively all rating scores). Employees who will be rated by the appraisal system may be taught how it will operate to ensure their understanding of the evaluation process and to instill greater trust in the system. Finally, organizations may establish a formal process for employees to offer feedback or to challenge their appraisals. Training both employees and supervisors may increase the appraisal system's transparency, which, according to the MSPB, can promote "shared understanding of the [employee's] expectations" and "build trust" both in the system and between the supervisor and employee. Most federal performance-based pay systems operate on a broad-banded pay structure. Instead of the 15-step General Schedule (GS) scale that serves as the pay structure for most federal employees, those who are in a performance-based system have pay bands that usually encompass a wider pay range than was formerly in a single GS grade. The wider pay bands may allow mangers greater flexibility to hire promising employees at a higher rate of pay and to retain high-performing employees by increasing their pay at a faster pace than was possible under the GS scale. Pay bands, like GS grades, cap maximum--and limit minimum--pay rates. Unlike the GS scale, however, most pay bands do not have automatic increases within each band. Instead, in a banded system, funds that were formerly used to pay for within-grade and quality-step increases in the general schedule are often pooled and used to fund the pay increases determined at the end of the performance appraisal cycle. Some agencies, like the Government Accountability Office (GAO), have included additional performance elements in their pay bands. In two of its four pay bands, GAO originally established speed bumps, which are designed to intentionally slow some employees' progress through a pay band, at about the 75% mark of the bands. In one band, GAO required employees at or above the speed bump to receive ratings in the top 50% of averages for their band and team to qualify for the annual pay adjustment. In the other band, employees had to be in the top 80% of averages for their band and team. The establishment of speed bumps was controversial, and led to employee appeals and prompted federal legislation ( P.L. 110-323 ). Pursuant to P.L. 110-323 , all GAO employees with a satisfactory performance rating are now statutorily required to receive an annual pay increase that is at least equal to that of similar employees in their geographic pay area who are on the GS pay scale. Once an organization decides whether to create pay bands before implementing performance-based pay, it can begin to design the pay-out structure. An effective merit pay system, according to Fisher et al., will incorporate three components: expectancy (the employee's belief that he or she is capable of meeting expectations), instrumentality (the employee's belief that his or her actual performance does prompt the reward), and valence (the employee's belief that the reward is desirable or valued). Most effective merit-pay systems attempt to maximize each of these components by clarifying criteria, making the system transparent, and offering consistent, desirable pay increases to those who qualify for them. For most federal departments and agencies, merit pay involves taking an employee's performance evaluation and using it to determine the percentage increase an employee will receive in his or her pay. Available performance-based pay funding is often pooled. The funding may come from a variety of sources, including a line item in the organization's budget, a determination from the organization's administration, or funding formerly used to pay for within-grade and quality-step increases. Pay banding may also eliminate some costs formerly used to consider promotions because employees no longer need to receive a promotion to secure an increase in pay. The wider pay band allows employees to acquire significant pay increases without having to apply for and receive a promotion. This cost savings may also be added to the merit-pay funding pool. The size of the pool is a primary consideration when determining each employee's individual pay increase. Because the pay pool's size depends on larger macroeconomic and budgetary trends, performance-based payouts often vary in size from year to year. This variability in pay increases may lead to valence problems for the merit-based pay system. If employees do not believe their performance will lead to a pay increase of a sizeable value, the system may not operate properly. Additionally, because employee performance may stay consistent from year to year while payouts vary, employees may fail to see a solid link between their performance and their pay increase. Performance-based pay is designed to reward some employees with higher pay than others. Inherent in this design is an inequity in pay among colleagues, which may lead to an atmosphere of competition rather than teamwork. As the MPSB has observed, the structure of performance-based pay can produce a "win-lose situation" that "may create resistance among those who perceive that their incomes are falling behind and heighten competition in a negative way." In some pay systems, an employee's location along the pay-band spectrum affects his or her total pay. For example, at the Farm Credit Administration (FCA), an employee at the higher end of the pay spectrum receives a lower percentage increase in pay than someone at the lower end of the pay band with an identical appraisal score. The lower pay percentage increase for the employee with the higher pay occurs because the Department of Labor has determined that the employee's basic rate of pay is already higher than the market rate for that position. In addition, a higher basic pay rate will yield a higher pay increase than a lower pay rate multiplied by the same percentage pay raise. Employees who have already reached their pay band's pay cap may receive no pay bonus, or they may be permitted to receive their pay increase as a one-time lump sum that will not modify their rate of basic pay. In these cases, the pay increases may not be included when retirement and pension pay are calculated. Employees who have reached their pay maximum may have less financial incentive to maintain their work pace and effectiveness. Agencies with many employees at the pay cap may face higher rates of retirement, leading to both recruitment and retention concerns. Performance-based pay can be beneficial to both employees and the organization, but it also may present new issues in an organization that has historically used more traditional pay structures. In some cases, performance-based pay for federal workers may have increased retention of effective employees, increased overall employee productivity, led to cost savings for the organization, and aided in the attainment of organizational objectives in a more effective manner than under the GS pay scale. Adopting merit pay, however, takes substantial time and additional financial resources at the beginning of the implementation. In other cases, performance-based pay in federal agencies has prompted lawsuits and mistrust of pay system administrators. Experts suggest that organizations need to plan carefully the performance appraisal system that will inform merit pay, and the system must ensure that the financial rewards for effective performance are large enough to be desirable to employees. "With pay for performance, one needs to re-evaluate the motivation, retention, productivity, and organizational objectives continually, with the idea of fine-tuning the system to make sure rewards are aligned with desired performance." Experts also observe that rating officials and employees must be trained in how best to use the performance-based pay system. Supervisors, employees, and their representative unions must believe that a pay system is both fair and transparent. The most effective performance-based pay systems encourage communication throughout the process, use performance appraisals to improve performance management, and ensure that qualified employees' salaries keep pace with those of colleagues both in the public sector and in comparable private-sector positions. If an agency or department has bargaining unit employees, the agency may observe that unions generally have disliked and litigated performance-based pay systems because they believe the structures destroy solidarity and permit arbitrary or sometimes unintentionally racist, gender-biased, or ageist outcomes. Some unions fear that performance pay will force a return to the spoils system for federal personnel--that employees may be rewarded for partisan or political behavior. Members of Congress have expressed concern that giving agency managers more discretion may lead to increased misconduct by those managers. Further, the constitutional design of government leaves most agencies in the position of serving "many masters." As public administration professor Alasdair Roberts has asserted, the power struggle over control of executive branch agencies may be, in fact, a major roadblock to government-wide institution of performance-based pay.

In many occupations today, pay is intended to reflect employee performance--or how effectively, efficiently, or thoroughly one performs his or her job. The federal government is no different from the private sector in this regard. Nearly 300,000 federal employees are currently in pay systems that attempt to make pay increases contingent upon job performance--such a system is often referred to as either a merit-based pay system or a performance-based pay system. A basic challenge with such an arrangement is arriving at credible and objective performance measures. In addition, while the private sector is ultimately concerned that employee performance be of such effectiveness that it contributes to the profits of a business, the federal government has other objectives to which employee performance is expected to contribute--such as the efficient, economical, and effective provision of services to those who qualify for, and are otherwise entitled to, them. This report discusses issues related to measuring performance across the federal government and analyzes a variety of methods utilized by the government to measure employee performance and its linkage to pay. As developments warrant, this report will be updated.

Although the advent of digital technology has brought about higher quality for audio and video content, creators of such content and policy makers are concerned that, without adequate content protection measures, unlawful digital copying and distribution of copyrighted material may endanger the viability of the motion picture, television, and music industries. As a result, technological measures have been proposed that are aimed at protecting copyrighted media from, among other things, unauthorized reproduction, distribution, and performance. One of these content protection schemes is the Audio Protection Flag (APF or "audio flag"), which would protect the content of digital radio transmissions against unauthorized dissemination and reproduction. To understand digital audio, an explanation of how analog and digital technology differ is helpful. Analog technology is characterized by an output system where the signal output is always proportional to the signal input. Because the outputs are analogous, the word "analog" is used. An analog mechanism is one where data is represented by continuously variable physical quantities like sound waves or electricity. Analog audio technologies include traditional radio (AM/FM radio), audio cassettes, and vinyl record albums. These technologies may deliver imprecise signals and background noise. Thus, the duplication of analog audio often erodes in quality over time or through "serial copying" (the making of a copy from copies). The term "digital" derives from the word "digit," as in a counting device. Digital audio technologies represent audio data in a "binary" fashion (using 1s and 0s). Rather than using a physical quantity, a digital audio signal employs an informational stream of code. Consequently, the code from a digital audio source can be played back or duplicated nearly infinitely and without any degradation of quality. Digital audio technologies include digital radio broadcasts (such as high-definition radio, or "HD Radio"), satellite radio, Internet radio, compact discs, and MP3-format music files. With the advent of digital technology, content providers have been interested in using content security measures to prevent unauthorized distribution and reproduction of copyrighted works. These technology-based measures are generally referred to as "digital rights management," or DRM. As the name suggests, DRM applies only to digital media (which would include analog transmissions converted into digital format). Examples of DRM include Internet video streaming protections, encrypted transmissions, and Content Scrambling Systems (CSS) on DVD media. In 1998, Congress passed the Digital Millennium Copyright Act (DMCA). The DMCA added a new chapter 12 to the Copyright Act, 17 U.S.C. SSSS 1201-1205, entitled "Copyright Protection and Management Systems." Section 1201(a)(1) prohibits any person from circumventing a technological measure that effectively controls access to a copyrighted work. This newly created right of "access" granted to copyright holders makes the act of gaining access to copyrighted material by circumventing DRM security measures, itself, a violation of the Copyright Act. Prohibited conduct includes descrambling a scrambled work, decrypting an encrypted work, and avoiding, bypassing, removing, deactivating, or impairing a technological measure without the authority of the copyright owner. In addition, the DMCA prohibits the selling of products or services that circumvent access-control measures, as well as trafficking in devices that circumvent "technological measures" protecting "a right" of the copyright owner. In contrast to copyright infringement, which concerns the unauthorized or unexcused use of copyrighted material, the anti-circumvention provisions of the Copyright Act prohibit the design, manufacture, import, offer to the public, or trafficking in technology produced to circumvent copyright encryption programs, regardless of the actual existence or absence of copyright infringement. One form of DRM technology that may be used to protect the content of digital audio transmissions from unauthorized distribution and reproduction is the "audio flag." The flag has two primary aspects: a physical component and rules and standards that define how devices communicate with flagged content transmitted from digital audio sources. For instance, a satellite digital audio radio stream of a particular broadcast music program could contain an audio flag (the mechanism) that prohibits any reproduction or further dissemination of the broadcast (the standard). The audio flag, according to its proponents, would operate in a similar manner as the broadcast video flag that has been proposed for digital television transmissions. Functionally, the audio flag system would work by embedding a special signal within transmitted digital audio data, informing the receiving device of certain copyright restrictions on the use of the content by the listener--for example, limiting the number of copies of a recording that the user may make. Those advocating the use of an audio flag for digital radio programming include musicians, songwriters, record labels, and other providers of audio content that could be broadcast to the public through digital transmissions. The Copyright Act bestows several exclusive rights upon the creator of a work (or the individual having a legal interest in the work) that permit the copyright holder to control the use of the protected material. These statutory rights allow a copyright holder to do or to authorize, among other things, reproducing the work, distributing copies or phonorecords of the work, and publicly performing the work. Parties holding a copyright interest in content transmitted through digital radio services are interested in ensuring that such content is protected from unauthorized reproduction and distribution by the broadcast recipient; the audio flag, in their view, is an effective way to achieve this objective and enforce their rights. Proponents of audio flag technology also suggest that it would help prevent certain digital radio services (like satellite radio) from becoming a music download service through the creation of recording and storage devices that allow for further reproduction and distribution of audio broadcasts. Some copyright holders argue that these broadcasters must either pay additional royalties for the privilege of offering what appears to be a music download service, or comply with an audio flag regime that will effectively prevent broadcasters from allowing the recording in the first place. Critics of the audio flag proposal raise concerns that such a government-mandated measure may stifle technological innovation and restrict the rights of consumers to record broadcast radio--conduct that, according to audio flag opponents, is protected by the Audio Home Recording Act of 1992, as well as "fair use" principles in copyright law. The introduction of the Digital Audio Tape (DAT) by Sony and Philips in the mid-1980s prompted passage of the Audio Home Recording Act (AHRA) in 1992. A DAT recorder can record CD-quality sound onto a specialized digital cassette tape. Through the Recording Industry Association of America (RIAA), sound recording copyright holders turned to Congress for legislation in response to this technology, fearing that a consumer's ability to make near-perfect digital copies of music would displace sales of sound recordings in the marketplace. The AHRA requires manufacturers of certain types of digital audio recording devices to incorporate into each device copyright protection technology--a form of DRM called the Serial Copying Management System (SCMS), which allows the copying of an original digital work, but prevents "serial copying" (making a copy from a copy). In exchange, the AHRA exempts consumers from copyright infringement liability for private, noncommercial home recordings of music for personal use. Manufacturers of audio equipment, sellers of digital recording devices, and marketers of blank recordable media are also protected from contributory infringement liability upon payment of a statutory royalty fee--royalties that are distributed to the music industry. Opponents of the audio flag contend that the AHRA created a "right" for consumers to make digital recordings, a practice that might be limited or even effectively revoked by audio flag mandates. The doctrine of "fair use" in copyright law recognizes the right of the public to make reasonable use of copyrighted material, in certain instances, without the copyright holder's consent. Because the language of the fair use statute is illustrative, determinations of fair use are often difficult to make in advance--it calls for a "case-by-case" analysis by the courts. However, the statute recognizes fair use "for purposes such as criticism, comment, news reporting, teaching, scholarship, or research." A determination of fair use by a court considers four factors: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. In the context of digital music downloads and transmissions, some alleged copyright infringers have attempted to use the doctrine of fair use to avoid liability for activities such as sampling, "space shifting," and peer-to-peer (P2P) file sharing. These attempts have not been very successful, as several federal appellate courts have ruled against the applicability of the fair use doctrine for these purposes. No litigation has yet settled the extent to which home recording of an audio broadcast (whether transmitted through digital or analog means) is a legitimate fair use. Critics of the audio flag also suggest that it places technological, financial, and regulatory burdens that may stifle the innovation behind digital audio technologies. They argue that the audio flag may limit the functionality of digital audio transmissions in favor of analog transmissions--thereby negatively affecting the digital audio marketplace. Legislation that expressly delegates authority to the FCC to mandate audio flags for digital radio transmissions would appear to be necessary before the FCC could take such steps, in the wake of a decision by the U.S. Court of Appeals for the District of Columbia Circuit in 2005 that vacated an FCC order requiring digital televisions to be manufactured with the capability to prevent unauthorized redistributions of digital video content. The court ruled that the FCC lacked the statutory authority to establish such a broadcast video flag system for digital television under the Communications Act of 1934. Two bills were introduced in the 109 th Congress that would have delegated such authority; these may represent legislative approaches that could be taken in the 110 th Congress. This bill would have empowered the FCC to promulgate regulations governing the licensing of "all technologies necessary to make transmission and reception devices" for digital broadcast and satellite radio. The bill directed that any such digital audio regulation shall prohibit unauthorized copying and redistribution of transmitted content through the use of a broadcast flag or similar technology, "in a manner generally consistent with the purposes of other applicable law." Title IV, Subtitle C of S. 2686 would have granted the FCC the authority to issue "regulations governing the indiscriminate redistribution of audio content with respect to--digital radio broadcasts, satellite digital radio transmissions, and digital radios." It also directed the FCC to establish an advisory committee known as the "Digital Audio Review Board," composed of representatives from several industries, including information technology, software, consumer electronics, radio and satellite broadcasting, audio recording, music publishing, performing rights societies, and public interest groups. The Board would have been responsible for drafting a proposed regulation that reflects a consensus of the members of the Board and that is "consistent with fair use principles," although the bill did not define whether such "fair use" has the same connotation as that used in the copyright law.

Protecting audio content broadcasted by digital and satellite radios from unauthorized dissemination and reproduction is a priority for producers and owners of those copyrighted works. One technological measure that has been discussed is the Audio Protection Flag (APF or "audio flag"). The audio flag is a special signal that would be imbedded into digital audio radio transmissions, permitting only authorized devices to play back copyrighted audio transmissions or allowing only limited copying and retention of the content. Several bills introduced in the 109th Congress would have granted the Federal Communications Commission (FCC) authority to promulgate regulations to implement the audio flag. The parties most likely affected by any audio flag regime (including music copyright owners, digital radio broadcasters, stereo equipment manufacturers, and consumers) are divided as to the anticipated degree and scope of the impact that a government-mandated copyright protection scheme would have on the "fair use" rights of consumers to engage in private, noncommercial home recording. Critics of the audio flag proposal are concerned about its effect on technological innovation. However, proponents of the audio flag feel that such digital rights management (DRM) technology is needed to thwart piracy or infringement of intellectual property rights in music, sports commentary and coverage, and other types of copyrighted content that is transmitted to the public by emerging high-definition digital radio services (HD Radio) and satellite radio broadcasters. This report provides a brief explanation of the audio flag and its relationship to digital audio radio broadcasts, and summarizes legislative proposals considered by the 109th Congress, including H.R. 4861 (Audio Broadcast Flag Licensing Act of 2006) and S. 2686 (Digital Content Protection Act of 2006), that would have authorized its adoption. Although not enacted, these two bills represent approaches that may be taken in the 110th Congress to authorize the use of an audio flag for protecting broadcast digital audio content.

In its budget proposal for FY2014, the Obama Administration proposed a "strategic review" of the Tennessee Valley Authority (TVA), a federal government corporation established by the Tennessee Valley Authority Act (TVA Act) (16 U.S.C. 831). Reform TVA. Since its creation in the 1930s during the Great Depression, the federally owned and operated Tennessee Valley Authority (TVA) has been producing low-cost electricity and managing natural resources for a large portion of the Southeastern United States. TVA's power service territory includes most of Tennessee and parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Virginia, covering 80,000 square miles and serving more than nine million people. TVA is a self-financing Government corporation, funding operations through electricity sales and bond financing. In order to meet its future capacity needs, fulfill its environmental responsibilities, and modernize its aging generation system, TVA's current capital investment plan includes more than $25 billion of expenditures over the next 10 years. However, TVA's anticipated capital needs are likely to quickly exceed the agency's $30 billion statutory cap on indebtedness. Reducing or eliminating the federal Government's role in programs such as TVA, which have achieved their original objectives and no longer require Federal participation, can help put the Nation on a sustainable fiscal path. Given TVA's debt constraints and the impact to the Federal deficit of its increasing capital expenditures, the Administration intends to undertake a strategic review of options for addressing TVA's financial situation, including the possible divestiture of TVA, in part or as a whole. In proposing the strategic review, the Administration says that TVA has achieved its original objectives, and thus no longer requires federal participation. However, some have expressed their disagreement with the Administration's position, and support TVA's current role. The strategic review (to be conducted by the Office of Management and Budget) may thus consider options for addressing TVA's financial situation and its effect on the federal deficit, with divestiture of TVA (in whole or part) to be considered among the potential alternatives. TVA, for its part, is cooperating with the strategic review. This report will discuss the history and role of TVA mostly from an energy standpoint, considering current and future obligations, and other issues related to TVA's provision of electrical energy. Issues for Congress may involve consideration of whether a federal role is still necessary to achieve the TVA Act's objectives. TVA is a federal government corporation originally established by Congress in response to the Great Depression, essentially to "exist in perpetuity." The preamble to the TVA Act of 1933 lists flood control, reforestation, and agricultural and industrial development as primary considerations in the original establishment of the TVA. To improve the navigability and to provide for the flood control of the Tennessee River; to provide for reforestation and the proper use of marginal lands in the Tennessee Valley; to provide for the agricultural and industrial development of said valley; to provide for the national defense by the creation of a corporation for the operation of Government properties at and near Muscle Shoals in the State of Alabama, and for other purposes. TVA has incorporated the preamble into its mission statement, which lists these duties essentially in terms of TVA priorities. The mission of the Tennessee Valley Authority is to develop and operate the Tennessee River system to improve navigation, minimize flood damage, and to provide energy and related products and services safely, reliably, and at the lowest feasible cost to residents and businesses in the multi-state Tennessee Valley region. TVA's integrated management of the entire Tennessee River watershed optimizes the benefits of the water resource. Major functions of the corporation include: Management of the Tennessee River system for multiple purposes including navigation, flood control, power generation, water quality, public lands conservation, recreation, and economic development; Generation of electricity; Sale and transmission of electricity to wholesale and large industrial customers; Stimulation of economic development activities that generate a higher quality of life for citizens of the Tennessee Valley; Preservation and environmentally-sensitive management of TVA assets and federal lands entrusted to TVA; and Research and technology development that addresses environmental problems related to TVA's statutory responsibilities for river and land management and power generation. The operation of the Tennessee River system to improve navigation and minimize flood damage arguably remains TVA's primary obligation. Power generation at TVA was a part of the industrial development mission of TVA, with hydroelectric generation possibly being viewed as an opportunity which arose from dams mostly built for flood control and navigation purposes. While the focus of TVA's activities originally was largely on its flood control and economic development roles, TVA is now essentially a power generation company. TVA's business metrics are focused on optimizing TVA's financial position, and its operational goals are focused on providing electricity at the lowest feasible rates to its wholesale customers in the multi-state Tennessee Valley region. Initially, federal appropriations funded all TVA operations. Appropriations for the TVA power program ended in 1959, and appropriations for TVA's environmental stewardship and economic development activities were phased out by 1999. TVA is now fully self-financing, funding operations through electricity sales and power system bond financing. TVA makes no profit and receives no tax money. As shown in Figure 1 , TVA's electric power service territory covers almost all of Tennessee, and portions of Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Virginia. TVA is overseen by a Board of Directors with nine members (appointed by the President and confirmed by the U.S. Senate), each of whom serves a staggered five-year term. The Board of Directors sets TVA's wholesale electric power rates without approval by any other regulatory body. TVA provides electricity in an area that is largely free of competition from other electric power providers. This service territory is defined primarily by two provisions of federal law: the "fence," and the "anti-cherrypicking" provision. The fence limits the region in which TVA or distributors of TVA power may provide power. The anti-cherrypicking provision limits the ability of others to use the TVA transmission system for the purpose of serving customers within TVA's service area. From time to time there have been unsuccessful efforts to modify the protection of the anti-cherrypicking provision. Table 1 lists TVA's electric power generation capacity by category. As of 2010, TVA owned 11 coal-fired power generating stations, with a net summer capacity of 14,573 MegaWatts (MW). Units range in size from 107 MW (Johnsonville Units 1-6) to Cumberland Unit 1 at 1,239 MW. TVA operates 92 natural gas-fired combustion turbines with a net summer capacity of about 5,270 MW, mostly co-located at the coal power stations. Five combined cycle units are located at three stand-alone power stations, adding a further 2,143 MW of capacity. TVA also operates three nuclear power stations with six units currently operating with a total net summer capacity of 6,632 MW. TVA is currently completing construction of a second nuclear unit at the Watts Bar station, which will add a further 1,180 MW of net summer capacity. TVA's conventional hydropower system consists of 109 generating units at 28 sites mostly along the Tennessee River, with a total net summer capacity of approximately 4,157 MW. Pumped storage hydropower adds a further 1,653 MW from the Raccoon Mountain facility. TVA also sells hydropower produced by eight U.S. Army Corps of Engineers dams, and four dams owned by Alcoa on the Little Tennessee River. TVA owns very little non-hydro renewable generation itself, opting to rely instead on a "Standard Offer" (SO) for purchasing renewable energy. TVA says the SO "will help support TVA's vision and long-term strategy to emphasize cleaner air and greater energy efficiency." TVA buys various amounts of renewable energy throughout the year, varying generally by season and time of day for fixed rates of 4 to 16 cents per kiloWatt-hour (kWh) of energy produced. Power purchase agreements (PPAs) are available for up to 20 years for projects between 200 kiloWatts and 20 MW in capacity located within the TVA footprint. The SO resulted in four renewable projects with the potential for approximately eight MegaWatts of generating capacity. To connect generating facilities to its customers, TVA's transmission system consists primarily of approximately 15,940 circuit miles of transmission lines operating at the 500 kiloVolt (kV) and 161 kV levels, supported by 498 transmission substations, switchyards, and switching stations. The sale of electric power by the TVA is governed by the Tennessee Valley Authority Act of 1933, which requires electricity rates to cover power system operating costs, debt service, and other costs at rates as low as feasible. The Corporation shall charge rates for power which will produce gross revenues sufficient to provide funds for operation, maintenance, and administration of its power system; payments to States and counties in lieu of taxes; debt service on outstanding bonds, including provision and maintenance of reserve funds and other funds established in connection therewith; payments to the Treasury as a return on the appropriation investment pursuant to subsection (e) hereof; payment to the Treasury of the repayment sums specified in subsection (e) hereof; and such additional margin as the Board may consider desirable for investment in power system assets, retirement of outstanding bonds in advance of maturity, additional reduction of appropriation investment, and other purposes connected with the Corporation's power business having due regard for the primary objectives of the Act, including the objective that power shall be sold at rates as low as are feasible. Most of the power generated by TVA is sold at wholesale rates to electric distribution utilities. Rates for electricity are established by the TVA Board, in accord with the TVA Act. There are 155 distribution companies--municipal utility companies and cooperatives--that resell TVA power to end-use consumers. The municipal utilities make up the largest block of TVA customers. Cooperatives are customer-owned companies, many of which were originally formed to bring electricity to the most remote parts of the TVA region. Municipals and cooperatives represent the wholesale base of TVA's business, accounting for 85% of total revenue. TVA also sells power directly to 50 large industrial customers, and 6 federal government installations, and sells power to 12 utilities outside TVA's service territory. When comparing rates for electricity with electric utilities in other states, it should be noted that these are often the result of a number of local factors. Rates in two neighboring states in a region can differ measurably due to regulatory regime, types and sizes of power generation plants, costs of fuel, infrastructure, local geography, and other factors. TVA provided retail rate data for purposes of comparison with other states, submitting the following summary information for a "residential average effective rate," and a "non-residential average effective rate" (which represent retail residential and commercial rates). Both sets of rates are shown in Table 2 . TVA states that it has a goal to have its overall effective retail rate in the top quartile (with regard to being among electric utilities with the lowest rates) as benchmarked against the top 100 electric utilities by 2020. This is intended to help ensure that TVA's rates are competitive and conducive to its economic development goals. Effective residential rates may be directly compared to residential rates reported to the U.S. Department of Energy's Energy Information Administration (EIA) by electric utilities. Figure 2 shows electric utility residential rates for the period 2000 to 2010 reported from states surrounding TVA's service territory, compared to TVA's reported effective residential rate. As the figure shows, the residential electricity rates for the TVA are lower in the early years of the period than all compared states except Kentucky, and rise to mid-range for the latter years in the period. Given the overlap of TVA's service territory into several states (principally Mississippi, Alabama, and Kentucky), some of the state rates include TVA rates as a component. A similar representation of commercial customer rates from electric utilities is shown in Figure 3 . As shown in the graph, the TVA non-residential average effective rate (e.g., commercial rate) is the lowest band for all compared states for most years in the period. As also directed by the TVA Act, TVA has a role in providing economic and agricultural development, environmental stewardship, and the mission which is closest to electricity provision--technological innovation in the use of electric power. TVA's technology innovation mission comes from Section 10 of the TVA Act: ... the Board is hereby authorized and directed to make studies, experiments, and determinations to promote the wider and better use of electric power for agricultural and domestic use, or for small or local industries, and it may cooperate with State governments, or their subdivisions or agencies, with educational or research institutions, and with cooperatives or other organizations, in the application of electric power to the fuller and better balanced development of the resources of the region. TVA appears to have embraced this mission, with current initiatives including grid modernization and the Smart Grid, energy utilization (focused on technologies that can lead to new and potentially more efficient ways of using electricity in residential, commercial, and industrial settings, and the transportation sector), clean energy (investigating the performance, cost, sustainability, and availability of clean energy technologies), and electric vehicles and support systems. TVA is also preparing for the deployment of four small modular nuclear reactors (SMRs) at its Clinch River site, in connection with the mPower America consortium, which received a U.S. Department of Energy (DOE) cost-sharing award in 2012 for design and licensing. DOE will reimburse TVA for up to 50% of the eligible costs toward licensing the SMRs. Past TVA initiatives in technology innovation have helped with development of synchronous compensators, which can regulate voltage without expensive external capacitors or reactors, and can provide voltage support in the form of reactive power to the transmission grid. TVA also conducts an environmental research program at the TVA Environmental Research Center in Muscle Shoals, AL. The electric power industry in the United States is in a period of transition. The average age of power plants in the United States is now over 30 years, with the average life expectancy of most power plants being about 40 years. As with electric power plants, electric transmission and distribution system components are also aging, with power transformers averaging over 40 years of age, and 70% of transmission lines being 25 years or older. New environmental regulations under development at the U.S. Environmental Protection Agency (EPA) are imposing additional costs, and lower prices for natural gas resulting from new supplies of shale gas are bringing competition with regard to power generation choices. New and proposed EPA regulations would impose new requirements on fossil fuel-fired power plants. Some of these rules would be implemented at the federal level, while others would be implemented at the state level. They include the Cross-State Air Pollution Rule (which replaced the Clean Air Interstate Rule); the Mercury and Air Toxics Standards (MATS) (also known as the Utility Maximum Achievable Control Technology [MACT]) rule to reduce emissions of mercury, other metallic toxics, acid gases, and organic air toxics; proposals to regulate coal combustion residues; and the Clean Water Act Section 316(b) cooling water intake rule. However, only the Utility MACT rule is currently in effect. EPA also proposed standards in April 2012 for greenhouse gas (GHG) emissions which would require all new power plants to meet carbon dioxide emissions standards. President Obama recently announced a new climate change initiative in June 2013 which directed EPA to re-propose GHG emission standards for new electric power plants, and directed the agency to develop GHG standards for existing power plants by June 2015. Electric power generation is responsible for approximately 37% of U.S. domestic carbon dioxide emissions (the primary anthropogenic GHG), and over one-third of all U.S. GHG emissions. While most of these plants are well-maintained, they are generally not as efficient as newer power plants. With electric plant aging and new environmental requirements necessitating investment to continue operations, many utilities are looking at retirement or replacement decisions, especially for older coal plants. TVA is facing the same forces driving change as is the rest of the electric power industry. To plan for the future of its system, TVA was required by the Energy Policy Act of 1992 ( P.L. 102-486 ) to use a least-cost planning process to select energy resources for system use. TVA thus employs the integrated resource plan (IRP) methodology to account for system costs which set the cost of service used as the basis for its electricity rates. The [IRP] will equip TVA to meet its customers' needs effectively while addressing the substantial challenges that face the electric utility industry. The planning direction it recommends will give TVA flexibility to make sound choices amid economic and regulatory uncertainty. This recommended planning direction balances costs, energy efficiency and reliability, environmental responsibility and competitive prices for customers. In the 2011 IRP, TVA states that it expects growth in the demand for electricity in its service territory, but not at the levels in past periods. However, when considering overall growth in demand and the levels of power generation it can expect from its viable generation resources, TVA identified a need for additional resources. TVA listed increasing competition, technological change, fuel costs, and environmental concerns as issues it faces. A primary concern has been the cost of complying with existing and anticipated emissions reduction requirements, which could make continued operation of many of TVA's aging coal-fired generation units not cost-effective, possibly resulting in their removal from service, perhaps permanently. TVA faces challenges related to fluctuating fuel prices and compliance with current and emerging environmental laws and regulations. In order to comply with these laws and regulations, TVA may install clean air equipment on coal-fired units and replace generating capacity of idled coal-fired units with cleaner-emissions nuclear and gas-fired units. Meeting these needs will require significant capital expenditures on TVA's part ... TVA states its goal in the IRP process is to "[c]reate a flexible plan that allows for uncertainty and permits adjustment in response to changed circumstances." The 2011 IRP developed a "recommended planning direction," which TVA has accepted as being consistent with its environmental policy and strategic vision. Among other actions, the IRP anticipates the idling of 2,400 MW to 4,700 MW of coal-fired capacity, replacing it with a variety of sources (as summarized in Table 3 ). TVA's 2011 IRP also plans for the addition of 850 MW of pumped-storage hydropower in the 2020 to 2024 timeframe to "increase reliability and operational flexibility." It should be noted that while the IRP presents a range of options for generating resource development, it does not present a specific commitment or timeline for new generating resources. Table 4 lists TVA's current estimate of costs and its planned expenditures for dealing with current and expected environmental requirements related to its coal-fired power plants. However, with new and proposed environmental requirements for power plants, the long-term costs of meeting these requirements and modernizing TVA's power plants are expected to be much greater. The Obama Administration's 2014 budget projects that the capital costs to fulfill TVA's environmental responsibilities and modernize its aging generation system will likely cause TVA to exceed its $30 billion statutory cap on indebtedness. As of March 2013, TVA recorded provisions for almost $11 billion in regulatory assets, which it regards as "incurred costs that have been deferred because such costs are probable of future recovery in customer rates." They include funds for decommissioning of its nuclear plants, non-nuclear decommissioning, clean-up of the coal ash spill at its Kingston coal plant, and unrealized losses on its commodity and interest rate derivatives. TVA's largest regulatory asset, accounting for over $5 billion of the total amount, is for deferred pension and other post-retirement benefits costs. TVA describes the process for recording regulatory assets, and the probability of recovering these costs (subject to approval by the TVA Board of Directors), as follows: TVA assesses whether the regulatory assets are probable of future recovery by considering factors such as applicable regulatory changes, potential legislation, and changes in technology. Based on these assessments, TVA believes the existing regulatory assets are probable of recovery. This determination reflects the current regulatory and political environment and is subject to change in the future. In the event that accounting rules for rate regulation were no longer applicable, TVA would be required to write off its regulatory assets and liabilities, resulting in charges to net income and other comprehensive income. If TVA is to undergo privatization or some change of its status as a government corporation, it is possible that a write-down or write-off of these regulatory assets will occur, as large deferred regulatory assets and costs present a potential financial risk to any acquiring entity in terms of cost recovery. TVA is required by the TVA Act to be self-supported using funds from the sale of electric power. The TVA Act also authorizes TVA to issue bonds, notes, or other forms of indebtedness up to $30 billion (total outstanding amount) at any one time. These instruments of indebtedness are used to provide financing for construction of power plants and other related capital needs. The Corporation [i.e., TVA] is authorized to issue and sell bonds, notes and other evidences of indebtedness (hereinafter collectively referred to as "bonds") in an amount not exceeding $30,000,000,000 outstanding at any one time to assist in financing its power program and to refund such bonds. The Corporation may, in performing functions authorized by this Act, use the proceeds of such bonds for the construction, acquisition, enlargement, improvement, or replacement of any plant or other facility used or to be used for the generation or transmission of electric power (including the portion of any multiple-purpose structure used or to be used for power generation); as may be required in connection with the lease, lease-purchase, or any contract for the power output of any such plant or other facility; and for other purposes incidental thereto. TVA recognizes the challenge that this limit poses to its plans to comply with environmental requirements and modernize its power plants, and has begun to explore ways to fund these needs. TVA faces challenges related to fluctuating fuel prices and compliance with current and emerging environmental laws and regulations. In order to comply with these laws and regulations, TVA may install clean air equipment on coal-fired units and replace generating capacity of idled coal-fired units with cleaner-emissions nuclear and gas-fired units. Meeting these needs will require significant capital expenditures on TVA's part, but TVA is constrained by the TVA Act which authorizes TVA to issues bonds, notes, or other evidences of indebtedness ("Bonds") in an amount not to exceed $30.0 billion outstanding at any one time. Without a legislative solution, this limitation may require TVA to seek alternative financing arrangements. ... The TVA Act authorizes TVA to issue Bonds in an amount not to exceed $30.0 billion outstanding at any time. Due to this limit on Bonds, TVA may not be able to use Bonds to finance all of the capital investments planned over the next decade. However, TVA believes that other forms of financing not subject to the limit on Bonds, including lease financings (such as the lease-purchase transaction involving the John Sevier [combined cycle facility]), can provide supplementary funding. Also, the impact of energy efficiency and demand response initiatives may reduce generation requirements and thereby reduce capital needs. TVA had revenues of $11.2 billion in FY2012, but had a net income on those revenues of only $60 million, with fuel costs and purchased power being TVA's single largest expense at $3.9 billion, followed by operations and maintenance expense at $3.5 billion. TVA currently has approximately $24.1 billion in indebtedness in outstanding bonds and notes, which counts toward the statutory cap of $30 billion (which has been in place since 1979). TVA's debts are paid solely from TVA's net proceeds for the sale of electricity. TVA's debts are not guaranteed by, nor are they obligations of, the federal government. However, while TVA pays for this debt principally using (non-federally guaranteed) bonds, the federal government still records TVA's debt as part of the federal deficit since it is a federal government corporation. TVA's principal mission is arguably the minimization of flood damage and stewardship of navigation, with the dams on TVA's system being key to this mission. Hydropower may thus be seen as a secondary opportunity arising from the control of the Tennessee River and its tributaries. However, revenues from the sale of electricity are now required to fund TVA water resource programs which were previously funded by federal appropriations and user fees. In 2011, TVA received almost $12 billion from sales of electricity. Multiple purpose dams and reservoirs are designed to balance water flows, taking in water during periods of high flow when rainfall is high to prevent or reduce downstream flooding, and releasing water during periods of low flow. During dry periods, hydroelectric generation may be curtailed to allow reservoirs to fill. The dam and reservoir system must maintain sufficient water volumes to accommodate other water resource needs, including drinking water, navigation, maintenance of fish habitats, and maintaining downstream water quality. The operation of multiple use dams must therefore accommodate several objectives, and releases of water for hydroelectric generation must include these other uses. If the hydropower assets were to be sold to private owners, how the navigation, flood damage mitigation, water quality, recreation, water supply, and land use missions could be safely and legally accomplished would be at question. Maximization of water flows for optimum power generation may not always be consistent with other demands of the river and reservoir system. In its FY2014 budget, the Obama Administration proposed a strategic review of the TVA, concerned that the agency is likely to incur substantial future costs as it seeks to modernize and meet environmental requirements. The strategic review may involve the definition of various options affecting the structure of TVA, and may involve some type of cost vs. benefits analysis of these options. At this time, however, the details and direction of the Administration's review of TVA are not publicly known. The opinion of most TVA stakeholders seems to be in favor of keeping TVA as a federal government corporation, and they would likely oppose any proposal which might result in higher electricity rates. However, implementation of the current or a revised IRP is likely to result in increased electricity rates, even without a change in TVA's status. The Energy Policy Act of 1992 required TVA to institute a least cost planning program, which is manifested in TVA's current IRP process. Under the TVA's 2011 IRP, certain capital expenditures were envisioned requiring TVA to plan for more than $25 billion over the next 10 years in capital investment. This projected level of investment could mean that the agency's $30 billion statutory limit would be quickly exceeded, given that current indebtedness is approximately $24 billion. TVA's own concerns on how to fund the costs of meeting anticipated environmental requirements and modernizing power plants highlighted the issue, with cost reductions, higher rates, creative lease and leaseback agreements, or raising the $30 billion statutory cap on indebtedness suggested as possible solutions. While the potential for a sale of TVA's assets (in whole or part) has been raised, Congress may wish to examine the issue of TVA's indebtedness and investigate whether it should: Raise the statutory limit. This option would allow TVA to fund the projected capital investment plan recommended by the 2011 IRP. The current $30 billion statutory limit has been in place since 1979. An average expected service life for a fossil or nuclear steam power plant is approximately 40 years. Such an option would allow TVA to continue functioning as it does now, but would increase the federal deficit. Another option would be to allow other electricity providers or competition within TVA's service territory, thus reducing the need for new TVA-owned or leased generation resources. A revision to the TVA Act would likely be required. Maintain the current statutory limit. Such an option may require a reduced power generation mission, with strict limits on power plants or related infrastructure built to replace retired units. A new IRP would be focused on a reduced capital investment plan. The TVA Act would likely have to be revised to allow other or competing entities to supply power in TVA's service territory to make up for lost TVA generation. Reduce the statutory limit. Such an option would likely involve a federal plan to restructure TVA's indebtedness, with a goal of either reducing or paying off TVA's indebtedness. Such a plan may ultimately reduce the power generation mission of TVA. Funding of TVA's navigation, flood damage control, and other water resource missions may have to revert to federal government appropriations. The TVA Act would likely have to be revised to allow other or competing entities to supply power in TVA's service territory to make up for lost TVA generation. TVA's electric power mission requires that "power shall be sold at rates as low as are feasible." Largely because of this directive, TVA's electric rates have been among the lower rates for electricity. However, given TVA's projected capital requirements identified by the IRP process, and TVA's statutory limit on indebtedness, Congress may want to consider: Whether to amend the TVA Act, allowing TVA to sell (either in whole or in part) its wholesale power at market-based rates. Such an option may modify the mission to provide power at costs as low as possible, but may reduce the need for TVA to finance some portion of its future power plant construction needs, and thus may reduce TVA indebtedness. The Administration has stated its belief that TVA has achieved its original objectives, and these original objectives no longer require federal participation. However, keeping TVA as a federal government corporation appears to be the preference of most TVA stakeholders. In looking at the issue, Congress may want to: Allow TVA to continue as it does, funding its needs from operating revenues, power program financing, and creative approaches to financing new power plant construction. No change to the current mission of TVA would be made. However, given the ongoing strategic review, some type of administrative determination may be required at some point to ensure that TVA has the means to capably address its projected future cost obligations. Redefine TVA's status and designation as a government corporation. Since TVA debt securities are not obligations of the U.S. government and do not carry a government guarantee, TVA's current indebtedness has arguably little or no real impact on the federal budget. Since no single definition of "government corporation" currently exists, a potential definition of a new "self-sustaining" entity may be designed to remove TVA's indebtedness from the balance sheets of the federal government. New legislation would likely be required. Among other implications, such an approach is likely to increase TVA's financing costs, since any perceived backing of TVA's debt by the federal government would be removed. Consider modifying TVA's missions. For example, TVA's navigation, flood control, and related obligations and funding could be separated from its economic development, power generation, and technology innovation missions, perhaps investing these roles in at least two separate federal corporations. Such an option would likely require legislation to revise or repeal the TVA Act. Examine TVA's diverse missions, and determine itself whether these missions have been accomplished to such an extent that, going forward, federal participation is no longer warranted. Ending the federal role may mean a substantial portion of TVA's debt could be removed from being counted under the federal deficit. Such an option would likely require legislation to revise or repeal the TVA Act. If privatization were to follow, dissolution of TVA as a single entity may ensue. A market-based valuation of TVA's assets would likely be required, with possible write-downs of some of these assets. It is possible that some of TVA's nuclear or fossil power generation may remain under federal ownership or trust, as decommissioning or other obligations related to these plants may inhibit sale at a fair market price or discourage private ownership altogether. If the hydropower assets were to be sold to private owners, how the navigation, flood damage mitigation, water quality, recreation, water supply, and land use missions could be safely and legally accomplished would be at question. Maximization of water flows for optimum power generation may not always be consistent with other demands of the river and reservoir system.

In its budget proposal for FY2014, the Obama Administration proposed a "strategic review" of the Tennessee Valley Authority (TVA), a federal government corporation established by the Tennessee Valley Authority Act (TVA Act) (16 U.S.C. 831) in 1933. The preamble to the TVA Act lists flood control, reforestation, and agricultural and industrial development as primary considerations in the original establishment of the TVA. TVA is now required by the TVA Act to be self-supported using funds from the sale of electric power. The TVA Act authorizes TVA to issue bonds, notes, or other forms of indebtedness up to $30 billion at any one time. These instruments are used to provide financing for construction of power plants and other related capital needs. TVA currently has approximately $24.1 billion in indebtedness in outstanding bonds and notes which counts toward the statutory cap of $30 billion (which has been in place since 1979). TVA's debts are paid solely from TVA's net proceeds for the sale of electricity. TVA's debts are not guaranteed by, nor are they obligations of, the federal government. However, while TVA pays for this debt principally using bonds, the federal government still records TVA's debt as part of the federal deficit since it is a federal government corporation. The electric power industry in the United States is in a period of transition, and TVA is facing the same forces driving change as is the rest of the electric power industry. Primary concerns include fuel cost issues of coal-fired power generation vs. natural gas, and the cost of complying with existing and anticipated environmental requirements, which could make continued operation of many of TVA's aging coal-fired generation units not cost-effective, and perhaps result in their retirement. The Obama Administration's FY2014 budget projects that the capital costs to fulfill TVA's environmental responsibilities and modernize its aging generation system will likely cause TVA to exceed its $30 billion statutory cap on indebtedness. In proposing the strategic review, the Administration says that TVA has achieved its original objectives, and thus no longer requires federal participation. The strategic review may thus consider options for addressing TVA's financial situation and its effect on the federal deficit, with divestiture of TVA (in whole or part) to be considered among the potential alternatives, most of which would require amending the TVA Act. Congress may want to consider various options for TVA, which range from allowing TVA to continue as it does, funding its capital needs from operating revenues and power program financings, to modifying TVA's missions. Congress may also opt to redefine TVA's status and designation as a government corporation. Since TVA debt securities are not obligations of the U.S. government and do not carry a government guarantee, TVA's current indebtedness has arguably little or no real impact on the federal budget. Congress may also wish to examine the issue of TVA's indebtedness and investigate potential options. These may include raising the statutory limit thus allowing TVA to fund the projected investment, examining TVA's capital investment plans and process, investigating ways to reduce TVA's statutory cap with an eye to reducing the impact on the federal deficit, or looking at ways to restructure TVA's indebtedness, with a goal of either reducing or paying off TVA's indebtedness. TVA's principal mission is arguably the minimization of flood damage and stewardship of water resources and navigation, with the dams on TVA's system being key to this mission and power generation arguably being a secondary concern. The operation of multiple use dams must be designed to accommodate several objectives, and releases of water for hydroelectric generation can also contribute to other water uses. Congress may want to consider how the navigation, flood control, and related missions may be safely and legally accomplished under a privatized scenario, since maximization of flows for optimum power generation may not be consistent with other demands of the river and reservoir system.

The procedure for appointing a Justice to the Supreme Court of the United States is provided for by the Constitution in only a few words. The "Appointments Clause" (Article II, Section 2, clause 2) states that the President "shall nominate, and by and with the Advice and Consent of the Senate, shall appoint ... Judges of the supreme Court." The process of appointing Justices has undergone changes over two centuries, but its most basic feature--the sharing of power between the President and Senate--has remained unchanged. To receive an appointment to the Court, a candidate must first be nominated by the President and then confirmed by the Senate. This report provides information and analyses related to the debate and consideration of Supreme Court nominations by the full Senate once nominations are reported by the Judiciary Committee. Once the full Senate begins debate on a Supreme Court nomination, many Senators typically will take part in the debate. Some, in their remarks, underscore the importance of the Senate's "advice and consent" role, and the consequent responsibility to carefully determine the qualifications of a nominee before voting to confirm. Typically, each Senator who takes the floor states his or her reasons for voting in favor of or against a nominee's confirmation. The criteria used to evaluate a Supreme Court nominee are an individual matter for each Senator. In their floor remarks, some Senators may cite a nominee's professional qualifications or character as the key criterion, others may stress the importance of the nominee's judicial philosophy or views on constitutional issues, while still others may indicate that they are influenced in varying degrees by all of these criteria. Just as most Presidents want their Supreme Court nominees to have unquestionably outstanding legal qualifications, most Senators also look for a high degree of merit in nominees to the Court. Consequently, floor remarks by Senators often focus, in part, on the professional qualifications of a nominee--both in recognition of the demanding nature of the work that awaits an appointee to the Court, but also because of the public's expectations that a Supreme Court nominee be highly qualified. With such expectations of excellence, floor remarks by Senators often highlight the various ways in which nominees have distinguished themselves in the law (as lower court judges, legal scholars, or attorneys in private practice), or in other types of professional positions (such as elective office). Given the importance of a nominee's professional qualifications in the selection and confirmation process, Senators have on occasion questioned--either directly or indirectly in their floor remarks--whether a nominee has the requisite professional qualifications or experience to be appointed to the Court. In recent decades, Senate debate on virtually every Supreme Court nomination has focused to some extent on the nominee's judicial philosophy, ideology, constitutional values, or known positions on specific legal controversies. Many highly controversial decisions of the Court in recent decades have been closely decided, by 5-4 votes, appearing to underscore a long-standing philosophical or ideological divide in the Court between its more so-called liberal and so-called conservative members. A new appointee to the Court, Senators recognize, could have a potentially decisive impact on the Court's currently perceived ideological "balance" and on whether past rulings of the Court will be upheld, modified, or overturned in the future. Announcements by the Court of 5-4 decisions, a journalist covering the Court in 2001 wrote, had "become routine, a familiar reminder of how much the next appointment to the court will matter." Senators sometimes will indicate in their floor statements whether they believe the views of a particular nominee, although not in complete accord with their own views, nonetheless, fall within a broad range of acceptable legal thinking. Senators' concerns with a nominee's judicial philosophy or ideology may become heightened, and their positions more polarized relative to other Senators', if a nominee's philosophical orientation is seen as controversial, or if the President is perceived to have made the nomination with the specific intention of changing the Court's ideological balance. During the George W. Bush presidency, a Senate Judiciary subcommittee examined the question of what role ideology should play in the selection and confirmation of federal judges. In his opening remarks, the chair of the subcommittee, Senator Charles E. Schumer (D-NY), stated that it was clear that "the ideology of particular nominees often plays a significant role in the confirmation process." The current era, he said, "certainly justifies Senate opposition to judicial nominees whose views fall outside the mainstream and who have been selected in an attempt to further tilt the courts in an ideological direction." By contrast, Senator Orrin G. Hatch (R-UT), in testimony before the subcommittee, declared that there "are myriad reasons why political ideology has not been--and is not--an appropriate measure of judicial qualifications. Fundamentally," he continued, "the Senate's responsibility to provide advice and consent does not include an ideological litmus test because a nominee's personal opinions are largely irrelevant so long as the nominee can set those opinions aside and follow the law fairly and impartially as a judge." More recently, Senators of both parties have based, at least in part, their opposition to particular Supreme Court nominations on the belief that a nominee's ideological disposition or views on specific issues fall outside the mainstream of legal thought or public opinion. Other factors also may figure importantly into a Senator's confirmation decisions. One, it has been suggested, is peer influence in the Senate (especially, perhaps, when the nomination is viewed as controversial). Particularly influential, for instance, might be Senate colleagues who are championing a nominee or spearheading the opposition, or who played prominent roles in the Judiciary Committee hearings stage. Another consideration for Senators will be the views of their constituents, especially if many voters back home are thought to feel strongly about a nomination. Other influences may be the views of a Senator's advisers, family, and friends, as well as the position taken on the nomination by advocacy groups that the Senator ordinarily trusts or looks to for perspective. Just as Presidents are assumed to do when considering prospective nominees for the Supreme Court, Senators may evaluate the suitability of a Supreme Court nominee according to whether certain groups, constituencies, or individuals with certain characteristics are adequately represented on the Court. Among the representational criteria commonly considered have been the nominee's party affiliation, geographic origin, ethnicity, religion, and gender. When considering Supreme Court nominations, Senators may also take Senate institutional factors into account. For instance, the role, if any, that Senators from the home state of a nominee played in the nominee's selection, as well as their support for or opposition to the nominee, may be of interest to other Senators. At the same time, Senators may be interested in the extent to which the President, prior to selecting the nominee, sought advice from other quarters in the Senate--for instance, from Senate party leaders and from the chair, ranking minority Member, and other Senators on the Judiciary Committee. A President's prior consultation with a wide range of Senators concerning a nominee may be a positive factor for other Members of the Senate, by virtue of conveying presidential respect for the role of Senate advice, as well as Senate consent, in the judicial appointments process. Sometimes, Senators may find themselves debating whether the Senate, in its "advice and consent" role, should defer to the President and give a nominee the "benefit of the doubt." This issue received particular attention during Senate consideration of the Supreme Court nomination of Clarence Thomas in 1991. In that debate, some Thomas supporters argued that the Senate, as a rule, should defer to the President's judgment concerning a nominee except when unfavorable information is presented overcoming the presumption in the nominee's favor. Opponents, by contrast, rejected the notion that there was a presumption in favor of a Supreme Court nominee at the start of the confirmation process or that the President, in his selection of a nominee, is owed any special deference. After the Judiciary Committee has reported a nomination, it is placed on the Executive Calendar and assigned a calendar number by the executive clerk of the Senate. As with other nominations listed in the Executive Calendar , information about a Supreme Court nomination includes the name and office of the nominee; the name of the previous holder of the office; whether the committee reported the nomination favorably, unfavorably, or without recommendation; and, if there is a printed report, the report number. Business on the Executive Calendar , which consists of treaties and nominations, is considered in executive session. Unless voted otherwise by the Senate, executive sessions are open to the public. Floor debate on a Supreme Court nomination, in contemporary practice, invariably has been conducted in public session, open to the public and press and, since 1986, to live nationwide television coverage. The Senate's executive business is composed of nominations and treaties. The Senate considers such business in executive session. Since the Senate typically begins its day in legislative session on any day it sits, the decision to proceed to executive session and consider a specific nomination is made while the Senate is in legislative session. Consideration of a nomination is scheduled by the majority leader, who typically consults with the minority leader and all interested Senators. In previous Congresses, the typical practice in calling up a Supreme Court nomination was for the majority leader to consult with the minority leader and interested Senators and to ask for unanimous consent that the Senate proceed to executive session and consider the nomination. The leader asked for unanimous consent to proceed to executive session to consider the nomination immediately, or at some specified time in the future. A unanimous consent request also could include a limit on the time that will be allowed for debate and specify the date and time on which the Senate will vote on a nomination. Typically, the amount of time agreed upon for debate is divided evenly between the majority and minority parties, who usually have as their respective floor managers the chair and ranking minority Member of the Judiciary Committee. If agreed to, a time limit on debate, with a date and time set for final Senate vote on the nomination, precludes unlimited debate or delay in considering a nomination and the possibility of a filibuster. Conversely, if the Senate agrees by unanimous consent to consider a nomination, but does not provide for a time limit on debate or specify when, or under what circumstances, a Senate vote will take place, extended debate is possible, although not necessarily inevitable. When unanimous consent to call up a nomination has not been secured, the majority leader may make a motion that the Senate proceed to consider the nomination. As already explained, such a motion is made while the Senate is in legislative session. The motion is not debatable. Since 1980, the Senate has explicitly established the precedent that a nondebatable motion may be made to go into executive session to take up a specified nomination . One congressional scholar observed that the precedent limits a potential filibuster to the nomination itself. Senate rules place no limits on how long floor consideration of a nomination may last. With time limits lacking, Senators opposing a Supreme Court nominee may seek, if they are so inclined, to use extended debate or delaying actions to postpone or prevent a final vote from occurring. The use of dilatory actions for such a purpose is known as a filibuster. By the same token, however, supporters of a Court nomination have available to them a procedure for placing time limits on consideration of a matter--the motion to invoke cloture. When the Senate agrees to a cloture motion, further consideration of the matter being debated is limited to 30 hours. The majority required for cloture on nominations, including Supreme Court nominations, is a majority of Senators voting, a quorum being present. By invoking cloture, the Senate ensures that a nomination may ultimately come to a vote and be decided by a voting majority. The Senate reinterpreted its cloture rule to allow a majority of Senators voting to invoke cloture on a Supreme Court nomination on April 6, 2017. Shortly thereafter the Senate was able to invoke cloture on the nomination of Neil M. Gorsuch to be a Supreme Court Justice by a vote of 55-45. Prior to the 2017 precedent, a supermajority was required to invoke cloture on a Supreme Court nomination. Motions to bring debate on Supreme Court nominations to a close under the previous procedures were made on four prior occasions. The first use occurred in 1968, when Senate supporters of Justice Abe Fortas tried unsuccessfully to end debate on the motion to proceed to his nomination to be Chief Justice. After the motion was debated at length, the Senate failed to invoke cloture by a 45-43 vote, prompting President Lyndon Johnson to withdraw the nomination. The 45 votes in favor of cloture fell far short of the supermajority required--then two-thirds of Senators present and voting, a quorum being present. A cloture motion to end debate on a Court nomination occurred again in 1971, when the Senate considered the nomination of William H. Rehnquist to be an Associate Justice. Although the cloture motion failed by a 52-42 vote, Rehnquist was confirmed later the same day. In 1986, a cloture motion was filed on a third Supreme Court nomination, this time of sitting Associate Justice Rehnquist to be Chief Justice. Supporters of the nomination mustered more than the three-fifths majority needed to end debate (with the Senate voting for cloture 68-31), and Justice Rehnquist subsequently was confirmed as Chief Justice. A cloture motion was presented to end consideration of a Supreme Court nomination a fourth time, during Senate consideration of the nomination of Samuel A. Alito Jr. in January 2006. The motion was presented on January 26, after two days of Senate floor debate on the nomination. On January 30, the Senate voted to invoke cloture by a 72-25 vote, and the next day it confirmed the Alito nomination by a final vote of 58-42. As one news analysis at the time observed, Senators "are traditionally hesitant to filibuster" Supreme Court nominations. Indicative of this, the article noted, was the fact that some of the "most divisive Supreme Court nominees in recent decades, including Associate Justice Clarence Thomas, have moved through the Senate without opponents resorting to that procedural weapon." In 1991, five days of debate on the Thomas nomination concluded with a 52-48 confirmation vote. The 48 opposition votes would have been more than enough to defeat a cloture motion if one had been filed. In three earlier episodes, Senate opponents of Supreme Court nominations appear to have refrained from use of the filibuster, even though their numbers would have been sufficient to defeat a cloture motion. In 1969, 1970, and 1987 respectively, lengthy debate occurred on the unsuccessful nominations of Clement F. Haynsworth, G. Harrold Carswell, and Robert H. Bork. In none of these episodes, however, was a cloture motion filed, and in each case debate ended with a Senate vote rejecting the nomination. Historically, there has been variation in the length of time from a President nominating a person for a vacancy on the Supreme Court to a final Senate vote on that person's nomination. For nominees since 1975 who have received a final floor vote, Figure 1 shows the number of calendar days that elapsed from the date on which the nomination was formally submitted to the Senate to the date on which the Senate voted whether to approve the nomination. Of the 15 nominees listed in the figure, Robert Bork waited the greatest number of days (108) from nomination to a final Senate vote--followed by Clarence Thomas (99), while John Paul Stevens waited the fewest number of days (19)--followed by Sandra Day O'Connor (33). Overall, the average number of days from nomination to final Senate vote is 69.6 days (or approximately 2.3 months), while the median is 69.0 days. Of the eight Justices currently serving on the Court, the average number of days from nomination to final Senate vote is 72.0 days (or approximately 2.4 months), while the median is 69.5 days. Among the current Justices, Ruth Bader Ginsburg waited the fewest number of days from nomination to confirmation (42), while Clarence Thomas waited the greatest number of days (99). There has also been variation in the length of time nominees to the Court have waited for a final vote after being reported by the Judiciary Committee. Figure 2 shows, for nominees since 1975 who received a final floor vote, the number of calendar days that elapsed from the date on which the nomination was reported by the Judiciary Committee to the date on which the Senate voted whether to approve the nomination. Of the 15 nominees listed in the figure, William Rehnquist and Antonin Scalia waited the greatest number of days (34) from committee report to a final Senate vote, while Neil Gorsuch waited the fewest number of days (4). The nominations of Rehnquist (to be Chief Justice) and Scalia (to be Associate Justice) were reported by the committee the day before the start of the August recess in 1986, which likely lengthened the amount of time from committee report to final vote for both nominations. Overall, the average number of days from committee report to final Senate vote is approximately 12 days, while the median is 7 days. Of the eight Justices currently serving on the Court, the average number of days from committee report to final Senate vote is 9.5 days, while the median is 8.0 days. Among the current Justices, Neil Gorsuch waited the fewest number of days from committee report to confirmation (4), while Clarence Thomas waited the greatest number of days (18). When floor debate on a nomination comes to a close, the presiding officer puts the question of confirmation to a vote. In doing so, the presiding officer typically states, "The question is, Will the Senate advise and consent to the nomination of [nominee's name] of [state of residence] to be an Associate Justice [or Chief Justice] on the Supreme Court?" A roll-call vote to confirm requires a simple majority of Senators present and voting, a quorum being present. Since 1967, every Senate vote on whether to confirm a Supreme Court nomination has been by roll call. Prior to 1967, by contrast, fewer than half of all of Senate votes on whether to confirm nominees to the Court were by roll call, with the rest by voice vote. For roll-call votes on Supreme Court nominations, the formal procedure by which Senators cast their votes on the floor has varied over the years. In recent decades prior to 1991, it was the usual practice for Senators, during the calling of the roll, to be free to come and go, and not have to be present in the Senate chamber for the entire calling of the roll. However, for several recent Supreme Court nominations to receive final Senate votes on confirmation the majority leader or the presiding officer, immediately prior to the calling of the roll, has asked all of the Senate's Members to remain seated at their desks during the entire vote--with each Senator rising and responding when his or her name is called. Voting from the desk during roll calls is in keeping with a standing order of the Senate, which rarely, however, is actually enforced; nevertheless, the rule has been applied by Senate leaders, in recent years, to roll-call votes on Supreme Court nominations, to mark the special significance for the Senate of deciding whether to confirm an appointment to the nation's highest court. Historically, vote margins on Supreme Court nominations have varied considerably. Most votes have been overwhelmingly in favor of confirmation. Some recorded votes, however, either confirming or rejecting a nomination, have been close. For nominations receiving a final floor vote since 1975, Figure 3 shows whether the nomination was approved by the Senate (identified in columns with blue dots) or not approved. For nominations approved, the level of support among Senators voting on the nomination is indicated as follows: (1) unanimous support (i.e., no nay votes cast on the nomination); (2) some opposition (fewer than 10 nay votes cast on the nomination); (3) some opposition (more than 10 nay votes cast on the nomination, but at least half of the Senators not belonging to the President's party still voted aye on the nomination); and (4) party opposition (a majority of Senators not belonging to the President's party cast nay votes on the nomination). The number of dots at the top of each column indicates the number of nominees in each category. Of the 15 nominations receiving a final floor vote, 14 were confirmed. Of the 14 nominations approved by the Senate, 6 were approved despite receiving nay votes from a majority of Senators not belonging to the President's party. These six include the four most recent nominations to the Court, those of Neil Gorsuch (2017), Elena Kagan (2010), Sonia Sotomayor (2009), and Samuel Alito (2006). Additionally, a majority of Senators not belonging to the President party's voted against the Clarence Thomas nomination (1991), as well as the nomination of William Rehnquist to be Chief Justice (1986). In only one of the six cases identified above did the President's party not also hold a majority of seats in the Senate. Specifically, in 1991, President George H. W. Bush (a Republican) nominated Thomas--who was opposed by a majority of Democratic Senators (and whose party was also the majority party in the Senate). In each of the other five cases, the majority of Senators opposed to the nomination belonged to the minority party in the Senate (i.e., Democrats were the minority party in 1986, 2006, and 2017, while Republicans were the minority party in 2009 and 2010). Of the 15 nominations presented in Figure 3 , 7 were approved by the Senate either unanimously or with fewer than 10 nay votes--but the last nomination to fall into either one of these categories was that of Stephen Breyer (nominated by President Clinton in 1994). Figure 4 provides some historical context for the number of nay votes received by the five most recent nominations to the Court (Gorsuch, Kagan, Sotomayor, Alito, and Roberts). Specifically, the figure identifies, of the 34 nominations since 1945 that received a final floor vote, the 10 nominations that received the greatest number of nay votes. Of the 10 nominations listed in the figure, 7 were confirmed by the Senate and 3 were rejected (the Bork, Haynsworth, and Carswell nominations). Of the seven nominations that were approved, five were for individuals currently serving on the Court--including the four most recent nominees (Gorsuch, Kagan, Sotomayor, and Alito). The relatively high number of nay votes received by recent nominations approved by the Senate for the Supreme Court is atypical historically (see further discussion below). The relatively high number of nay votes received by recent nominations reflects greater opposition than in the past by Senators not belonging to a President's party to nominations to the Court. The level of opposition to Supreme Court nominations approved by the Senate, as measured by the percentage of Senators voting against a nomination, has been relatively greater in recent years than in the past. Since 1789 there have been 50 nominations that received an up-or-down roll call vote on the Senate floor that also resulted in the nomination being approved by the Senate Of these 50 nominations, Figure 5 identifies the 10 for which the greatest percentage of Senators voted to oppose it. Of the 10 individuals listed in the figure, 4 are currently serving on the Court. The nominations of Justices Thomas, Gorsuch, Alito, and Kagan were opposed by 48.0%, 45.5%, 42.0%, and 37.0% of Senators, respectively. Additionally, the nominations of two other current Justices, Sonia Sotomayor and John Roberts Jr., rank among the 20 nominations (of 50) that received the most opposition (at 31.3% and 22.0%, respectively). For the 50 nominations, the median percentage of Senators voting "nay" on a nomination was 16.6% (with 6 of the nominations that were approved by roll call not receiving any nay votes). After a Senate vote to confirm a Supreme Court nomination, a Senator who voted on the prevailing side may, under Senate Rule XXXI, move to reconsider the vote. Under the rule, only one such motion to reconsider is in order on each nomination, and the tabling of the motion prevents any subsequent attempt to reconsider. The Senate typically deals with a motion to reconsider a Supreme Court confirmation in one of two ways. Immediately following the vote to confirm, a Senator may move to reconsider the vote, and the motion is promptly laid upon the table by unanimous consent. Alternatively, well before the vote to confirm, in a unanimous consent agreement, the Senate may provide that, in the event of confirmation, the motion to reconsider be tabled. The Senate, it should be noted, has never adopted a motion to reconsider a Supreme Court confirmation vote. Sometimes, after a Supreme Court nomination has been reported, the Senate may delay considering or voting on the nomination, in order to have the Senate Judiciary Committee address new issues concerning the nominee or more fully examine issues that it addressed earlier. Opponents of a nomination may also seek such delay, through recommittal of the nomination to the committee, to defeat the nomination indirectly, by burying it in committee. Although the Senate has never adopted a motion to reconsider a Supreme Court nomination after a confirmation vote, there have been at least eight pre-confirmation vote attempts to recommit Supreme Court nominations to the Judiciary Committee. Only two of those were successful. In the first of these two instances, in 1873-1874, the nomination, after being recommitted, stalled in committee until it was withdrawn by the President. In the second instance, in 1925, the Judiciary Committee re-reported the nomination, which the Senate then confirmed. On December 15, 1873, on the second day of its consideration of the nomination of Attorney General George H. Williams to be Chief Justice, the Senate ordered the nomination to be recommitted to the Judiciary Committee. The nomination had been favorably reported by the committee only four days earlier. During that four-day interval, however, various allegations were made against Williams, including charges that while Attorney General he had used his office to influence decisions profiting private companies in which he held interests. In ordering the nomination to be recommitted, the Senate authorized the Judiciary Committee "to send for persons and papers" --in evident reference to the new allegations made against the nominee. Although the Judiciary Committee held hearings after the recommittal, it did not re-report the nomination back to the Senate. Amid press reports of significant opposition to the nomination both in the Judiciary Committee and the Senate as a whole, the nomination, at Williams's request, was withdrawn by President Ulysses S. Grant on January 8, 1874. On January 26, 1925, the Senate recommitted the Supreme Court nomination of Attorney General Harlan F. Stone to the Judiciary Committee. Earlier, on January 21, the Judiciary Committee had favorably reported the nomination to the Senate. However, one historian wrote, "Stone's unanimous Judiciary Committee approval ran into trouble when it reached the Senate floor." A principal point of concern to some Senators was the decision made by Stone as Attorney General in December 1924 to expand a federal criminal investigation of Senator Burton K. Wheeler (D-MT)--an investigation initiated by Stone's predecessor as Attorney General, Harry Daugherty. Stone's most prominent critic on this point, Montana's other Democratic Senator, Thomas J. Walsh, demanded that the nomination be returned to the Judiciary Committee. By unanimous consent the Senate agreed, ordering the nomination to be "rereferred to the Committee on the Judiciary with a request that it be reported back to the Senate as soon as practicable." Two days after the recommittal, on January 28, the Judiciary Committee held hearings, with the nominee, at the committee's invitation, taking the then-unprecedented step of appearing before the committee. Under lengthy cross examination by Senator Walsh and several other Senators, the nominee defended his role in the Wheeler investigation. On February 2, 1925, the Judiciary Committee again reported the Stone nomination favorably to the Senate, "by voice vote, without dissent," and on February 5, 1925, the Senate confirmed Stone by a 71-6 vote. In 1991, during debate on Supreme Court nominee Clarence Thomas, the Senate--without recommitting the nomination to the Judiciary Committee--delayed its scheduled vote on the nomination specifically to allow the committee time for additional hearings on the nominee. On October 8, 1991, after four days of debate, the Senate, by unanimous consent, rescheduled its vote on the Thomas nomination, from October 8 to October 15. The purpose of this delay was to allow the Judiciary Committee to hold hearings on sexual harassment allegations made against the nominee by law professor Anita Hill, which had come to public light only after the Judiciary Committee had ordered the Thomas nomination to be reported, without recommendation, on September 27. Following three days of hearings, on October 11, 12, and 13, 1991, at which the Judiciary Committee heard testimony from Judge Thomas, Professor Hill, and other witnesses, the Senate, pursuant to its unanimous consent agreement, voted on the Thomas nomination as scheduled, on October 15, 1991, confirming the nominee by a 52-48 vote. Under the Constitution, the Senate alone votes on whether to confirm presidential nominations, the House of Representatives having no formal involvement in the confirmation process. If the Senate votes to confirm the nomination, the Secretary of the Senate then attests to a resolution of confirmation and transmits it to the White House. In turn, the President signs a document, called a commission, officially appointing the individual to the Court. Next, the signed commission "is returned to the Justice Department for engraving the date of appointment (determined by the actual day the president signs the commission) and for the signature of the attorney general and the placing of the Justice Department seal." The department then arranges for expedited delivery of the commission document to the new appointee. Once the President has signed the commission, the incoming Justice may be sworn into office. In fact, however, the new Justice actually takes two oaths of office--a judicial oath, as required by the Judiciary Act of 1789, and a constitutional oath, which, as required by Article VI of the Constitution, is administered to Members of Congress and all executive and judicial officers. Until recently, the most common practice of new appointees had been to take their judicial oath in private, usually within the Court, and, as desired by the Presidents who nominated them, to take their constitutional oaths in nationally televised ceremonies at the White House. In 2009, however, in a departure from that practice, Supreme Court nominee Sonia Sotomayor, after Senate confirmation, took both her constitutional and judicial oaths of office at the Supreme Court--with the constitutional oath administered in a private ceremony, and the judicial oath broadcast on television ("marking the first live coverage of such a ceremony in the institution's history"). This break from the practice of administering one of the oaths at the White House was attributed, in one report, to President Obama "heeding concerns expressed by some justices--most recently John Paul Stevens--that a White House ceremony sends the inappropriate message that justices are beholden to their appointing president." Following Sonia Sotomayor's example, President Obama's second Supreme Court nominee, Elena Kagan, took both her constitutional and judicial oaths of office at the Supreme Court as well. More recently, in contrast, Neil Gorsuch took the judicial oath of office at a public ceremony at the White House and the constitutional oath of office in a private ceremony in the Justices' conference room at the Supreme Court building. Subsequently, the Court itself, in its courtroom, also affords public recognition to the new Justice's appointment, in a formal ceremony called an "investiture," at which the Justice is sworn in yet again. This invitation-only event, for which reserved press seating is made available, is attended by the Court's other Justices, by family, friends, and former associates of the new Justice, and by outside dignitaries who may include the President and the Attorney General. The investiture typically occurs before the new Justice publicly takes his or her courtroom seat alongside the other members of the Court.

The procedure for appointing a Justice to the Supreme Court is provided for in the U.S. Constitution in only a few words. The "Appointments Clause" in the Constitution (Article II, Section 2, clause 2) states that the President "shall nominate, and by and with the Advice and Consent of the Senate, shall appoint ... Judges of the supreme Court." While the process of appointing Justices has undergone some changes over two centuries, its most essential feature--the sharing of power between the President and the Senate--has remained unchanged: to receive lifetime appointment to the Court, one must first be formally selected ("nominated") by the President and then approved ("confirmed") by the Senate. For the President, the appointment of a Supreme Court Justice can be a notable measure by which history will judge his Presidency. For the Senate, a decision to confirm is a solemn matter as well, for it is the Senate alone, through its "Advice and Consent" function, without any formal involvement of the House of Representatives, which acts as a safeguard on the President's judgment. This report provides information and analysis related to the final stage of the confirmation process for a nomination to the Supreme Court--the consideration of the nomination by the full Senate, including floor debate and the vote on whether to approve the nomination. Traditionally, the Senate has tended to be less deferential to the President in his choice of Supreme Court Justices than in his appointment of persons to high executive branch positions. The more exacting standard usually applied to Supreme Court nominations reflects the special importance of the Court, coequal to and independent of the presidency and Congress. Senators are also mindful that Justices--unlike persons elected to legislative office or confirmed to executive branch positions--receive the opportunity to serve a lifetime appointment during good behavior. The appointment of a Supreme Court Justice might or might not proceed smoothly. From the appointment of the first Justices in 1789 through its consideration of nominee Neil Gorsuch in 2017, the Senate has confirmed 118 Supreme Court nominations out of 162 received. Of the 44 nominations that were not confirmed, 12 were rejected outright in roll-call votes by the Senate, while nearly all of the rest, in the face of substantial committee or Senate opposition to the nominee or the President, were withdrawn by the President, or were postponed, tabled, or never voted on by the Senate. Six of the unconfirmed nominations, however, involved individuals who subsequently were renominated and confirmed. Additional CRS reports provide information and analysis related to other stages of the confirmation process for nominations to the Supreme Court. For a report related to the selection of a nominee by the President, see CRS Report R44235, Supreme Court Appointment Process: President's Selection of a Nominee, by [author name scrubbed]. For a report related to consideration of nominations by the Senate Judiciary Committee, see CRS Report R44236, Supreme Court Appointment Process: Consideration by the Senate Judiciary Committee, by [author name scrubbed].

State revenues declined during the recent economic recession (December 2007 through June 2009) and have not fully recovered. This decline in revenue continues to place considerable strain on state budgets. As a result, nearly all states made spending cuts--both to public programs and for public employees. At the same time, the recession increased the number of individuals meeting Medicaid's income eligibility standards. This resulted in higher program enrollment and therefore higher state spending on Medicaid benefits. Given declining state tax revenue, in conjunction with requirements in all states but Vermont for balanced operating budgets, states are faced with tough decisions about where to direct the limited funds. This state fiscal condition is a reason the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 as extended) included a temporary increase to the Federal Medical Assistance Percentage (FMAP) rates to help states maintain their Medicaid programs and free up funds that states would have otherwise used for Medicaid to address other state budgetary needs. As a condition of the receipt of the federal Medicaid matching funds made available under the ARRA FMAP provision, states were required to maintain their Medicaid programs with the same eligibility standards, methodologies, or procedures for Medicaid through June 30, 2011 (i.e., the end of the ARRA temporary FMAP adjustment period). This provision is referred to as the Maintenance of Effort (MOE) requirement. With the enactment of the Patient Protection and Affordable Care Act as modified by the Health Care and Education Reconciliation Act of 2010 (ACA, P.L. 111-148 as modified by P.L. 111-152 ), the ARRA MOE provisions were extended and expanded. ACA's MOE provisions were designed to ensure that individuals eligible for Medicaid or the State Children's Health Insurance Program (CHIP) did not lose coverage in the period between the date of enactment of ACA (March 23, 2010) and the implementation of the state health insurance exchanges (expected in 2014). Generally, beginning in 2014, Medicaid-eligible adults who were no longer protected by MOE would presumably have access to subsidized coverage through state exchanges. Under the ACA MOE, with certain exceptions, states are required to maintain their Medicaid and CHIP programs until 2014 with the same eligibility standards, methodologies, or procedures in place as of March 23, 2010. For Medicaid and CHIP-eligible children up to age 19, the MOE requirement extends through September 30, 2019. Failure to comply with these requirements would result in the loss all federal Medicaid matching funds. Because states are prohibited from curbing the cost of Medicaid through restricting eligibility standards due to the MOE requirements included in ARRA and ACA, over the past few years, states have focused cost containment strategies on reducing provider rates, making changes to their benefit packages, or implementing limitations on the use of benefits. However, with the June 30, 2011, phase-out of the enhanced federal Medicaid funding under ARRA, states have been seeking congressional relief from the MOE requirements. States want greater flexibility to restrain their Medicaid expenditures through eligibility restrictions. This report summarizes the MOE requirements enacted under ARRA and ACA and what these requirements have meant for states in terms of their actions to restrict Medicaid and/or State Children's Health Insurance Program (CHIP) eligibility. It also summarizes recent legislative activity to repeal the MOE requirements. Medicaid is a means-tested individual entitlement program that finances the delivery of primary and acute medical services as well as long-term care to more than 68 million people (FY2010) who meet both income and categorical eligibility criteria. While Medicaid is considered a mandatory program in federal budget terms, states choose whether to participate, and all 50 states, the District of Columbia, and the territories do. The federal and state governments share the cost of Medicaid. States are reimbursed by the federal government for a portion (the "federal share") of a state's Medicaid program costs. In FY2010, Medicaid spending totaled approximately $406 billion, with a federal share of $274 billion and a state share of $132 billion. As a condition of receipt of any federal financial participation (FFP), states must meet their state share requirements, have a plan for medical assistance approved by the Secretary of Health and Human Services (HHS), and comply with Medicaid program rules. CHIP was established by the Balanced Budget Act of 1997 ( P.L. 105-33 ) and was recently reauthorized by the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA, P.L. 111-3 ). CHIP provides health coverage to uninsured, low-income children in families with annual income above Medicaid eligibility thresholds. When certain conditions are met, CHIP coverage is also available to pregnant women and parents. In FY2010, there were approximately 7.7 million children and 347,143 adults (ever enrolled) in CHIP, and the estimated annual cost to the federal and state governments was roughly $11.4 billion in FY2010, with a federal share of $8.0 billion and a state share of $3.4 billion. As with Medicaid, CHIP is funded jointly by the federal government and the states, and is administered by the states. Also like Medicaid, CHIP is considered a mandatory spending program in terms of the federal budget. However, rather than being considered an individual entitlement, CHIP operates as a capped entitlement to states. States with approved CHIP plans that comply with program rules and that meet their state share requirements are entitled to a portion of a national annual appropriation. All 50 states, the District of Columbia, and the territories choose to participate in the CHIP program. During the most recent recession, Congress provided additional economic stimulus funding to states, including a temporary increase to the Federal Medical Assistance Percentage (FMAP) rate that defines the federal government's share of a state's expenditures for most Medicaid services. The temporary FMAP increase enacted under ARRA was later extended by P.L. 111-226 . The temporary FMAP increase runs for 11 quarters, from the first quarter of FY2009 through the third quarter of FY2011 (i.e., October 2008 through June 2011), subject to certain requirements, including a Maintenance of Effort (MOE) requirement. The ARRA MOE provision generally requires states with Medicaid programs in effect on July 1, 2008, to maintain their programs with the same eligibility standards, methodologies, or procedures for Medicaid through June 30, 2011 (i.e., the end of the ARRA temporary FMAP adjustment period). Failure to comply with the MOE requirements means a state would lose its increase in its federal Medicaid matching funds made available under the ARRA FMAP provision. Section 5001(f)(1)(B) and (C) permits states that have restricted their "eligibility standards, procedures, or methodologies" to reinstate them in any quarter to begin receiving the temporary FMAP increase. In addition, those states that reinstated their "eligibility standards, procedures, or methodologies" prior to July 1, 2009, received the increase for the first three quarters of FY2009. States were required by HHS to attest that they met the eligibility requirements. HHS indicated that four states (Mississippi, North Carolina, South Carolina, and Virginia) were ineligible when funding estimates were first released on February 23, 2009, but those states have since been cleared to receive the FMAP increase. A more recent study found that the ARRA requirements resulted in 14 states reversing and 5 states abandoning planned restrictions to eligibility. Under the Children's Health Insurance Program Reauthorization Act (CHIPRA) of 2009, a number of states were required to move their childless adult populations out of CHIP by December 31, 2009, and could apply to have them enrolled under a Medicaid waiver. However, ARRA FMAPs were not originally available for these childless adults because they had not been eligible for Medicaid on July 1, 2008 (as stated above). Under P.L. 111-226 , states can now receive ARRA FMAPs for non-pregnant childless adults in Medicaid who would have been eligible for CHIP based on standards in effect on December 31, 2009. It appears that Idaho, Michigan, and New Mexico will benefit from this provision. The Patient Protection and Affordable Care Act (ACA, P.L. 111-148 ), as amended by the Health Care and Education Reconciliation Act of 2010 ( P.L. 111-152 ), made significant changes to Medicaid and extended federal financing for CHIP through FY2015. The most noteworthy change begins in 2014, or sooner at state option, when states are required to expand Medicaid eligibility to individuals under age 65 with income up to 133% of the federal poverty level (FPL) (effectively 138% FPL with the Modified Adjusted Gross Income or MAGI 5% FPL income disregard). At the same time, with certain exceptions, ACA requires states to maintain current Medicaid and CHIP eligibility levels. Under ACA, the ARRA MOE provisions were extended and expanded. ACA's MOE provisions were designed to ensure that Medicaid and CHIP-eligible individuals did not lose coverage in the period between the date of enactment of ACA (March 23, 2010) and the implementation of the state health insurance exchanges (expected in 2014). The ACA Medicaid MOE provision generally requires that states with Medicaid programs in effect on March 23, 2010, maintain their programs with the same eligibility standards, methodologies, or procedures until the health insurance exchanges are operational. Additionally, the Medicaid MOE for Medicaid-eligible children up to age 19 continues until September 30, 2019. Failure to comply with the ACA MOE requirements would result in a loss of all federal Medicaid matching funds for that state. This differs from the ARRA MOE requirement, under which states that do not comply would only lose access to the additional federal funds made available through the increase in the FMAP rate. Section 2001(b)(3) provides for an exemption to this MOE requirement for states that have, or are projected to have, a budget deficit, but only with respect to individuals who are non-pregnant, non-disabled adults who are eligible for medical assistance under a state plan or waiver of a state plan, and whose income exceeds 133% FPL (or 138% FPL with the MAGI income counting disregard). This MOE provision does not prohibit states from cutting Medicaid in other ways, such as by reducing provider reimbursement rates or by eliminating optional benefits. States are not prohibited from expanding Medicaid coverage during the MOE period. Arizona had planned to "scale back eligibility" for parents and childless adults under its Medicaid Section 1115 waiver, but the state did not take these actions. Initially, Arizona concluded that the changes would violate the MOE requirements in ACA. However, later, in a February 15, 2011, letter to the governor of Arizona, the Secretary of HHS ruled that the MOE provision in ACA does not require Arizona to renew its Section 1115 waiver demonstration as is, beyond its expiration date of September 30, 2011. According to Secretary Sebelius's letter, any reduction in eligibility associated with the expiration of Arizona's demonstration "for individuals whose eligibility derives from the demonstration" would not constitute a violation of ACA's MOE requirements. In March 2011, Governor Brownback, of Kansas, sent a letter to the Secretary of HHS requesting approval to block grant the state's Medicaid program, and seeking "a complete waiver of the Maintenance of Effort (MOE) requirements." On March 30, 2011, the Secretary of HHS responded to the governor by saying, "I look forward to learning more details about your proposals." To date, a formal waiver proposal submission detailing Governor Brownback's proposal is not publicly available. With regard to states' actions using the "Section 2001(b)(3) exemption," no state has sought a state plan amendment to invoke the exemption under the Medicaid state plan authority. However, two states (i.e., Maine and Hawaii) have certified to CMS that the state is experiencing a budget shortfall under its Section 1115 waiver programs. Such certification represents the first in a two-step process for the state to begin scaling back its eligibility requirements. The second step of the process involves the state seeking CMS approval to make a change in the state's upper income eligibility. According to CMS, Maine has CMS approval to scale back its eligibility requirements but has not formally applied for the eligibility change. By contrast, Hawaii is in the process of seeking CMS approval to scale back its childless adult coverage from 200% FPL to 133% FPL. This CHIP-specific MOE provision generally requires states to maintain income "eligibility standards, methodologies and procedures" in effect as of March 23, 2010, through September 30, 2019, as a condition of receiving federal matching payments under Medicaid. Specifically, with the exception of waiting lists for enrolling children in CHIP or enrolling CHIP-eligible children in exchange plans when federal CHIP funding is no longer available, states cannot implement eligibility standards, methodologies, or procedures that are more restrictive than those in place on the date of enactment of ACA. However, states can expand their current income eligibility levels--that is, states can enact less restrictive standards, methodologies, or procedures. Prior to ACA, Arizona planned to "eliminate the KidsCare [CHIP] program effective June 15, 2010." However, the state did not take these actions. Arizona does, however, have HHS approval to freeze its CHIP program enrollment because Arizona's CHIP enrollment freeze was in place prior to the enactment of ACA (i.e., effective January 1, 2010). In a letter dated May 17, 2010, from Victoria Wachino, the Director of the Family and Children's Health Programs Group at the Centers for Medicare and Medicaid Services (CMS), to Ms. Monica Coury, the Assistant Director of the Office of Intergovernmental Relations for the state's Arizona Health Care Cost Containment System (AHCCCS), CMS stated: Prior to the enactment of the Affordable Care Act, Arizona had an approved State Plan to freeze enrollment and had stopped enrolling new children in CHIP pursuant to its eligibility freeze. Since the enrollment freeze was an eligibility procedure in place as of the March 23, 2010, MOE date, we do not believe that the continuation of the enrollment freeze would be a change in Arizona's eligibility procedures that would trigger an MOE violation. To obtain fiscal reprieve, some states have pondered either dropping out of Medicaid entirely or scaling back on eligibility. Recently, states have been seeking congressional relief from the MOE requirements, to provide them with greater flexibility to restrain Medicaid expenditures through eligibility restrictions. On May 3, 2011, the House of Representatives introduced H.R. 1683 , the State Flexibility Act, which would repeal the MOE requirements for Medicaid and CHIP included in ARRA and ACA. CBO and the staff of the Joint Committee on Taxation (JCT) estimated that enacting H.R. 1683 would reduce the federal deficit by approximately $2.1 billion over the 2012-2021 period. Their estimate includes the net impact on direct spending and revenues from changes in enrollment in Medicaid, CHIP, health insurance purchased through exchanges, and employer-based health insurance. Of this amount, CBO estimates that federal Medicaid spending would decline by roughly $1.5 billion over the five-year period (2012-2016), with no additional savings or costs occurring in the next five years of the budget window. For CHIP, CBO estimates that federal spending would decline by an estimated total of $8.8 billion over 10 years. The Medicaid and CHIP savings would be largely offset by increased enrollment in employer-sponsored plans and additional exchange subsidies. With regard to enrollment, CBO estimates that H.R. 1683 would reduce Medicaid and CHIP enrollment by about 400,000 individuals in 2013, of which approximately 300,000 would become uninsured and 100,000 would enroll in employer-based coverage. In 2014, individuals would be eligible for Medicaid based on the new income requirements established in ACA, eliminating the impact of repealing MOE requirements on Medicaid enrollment. In 2016, CBO estimates that CHIP enrollment would decline by about 1.7 million individuals, while employer-based insurance would increase by 700,000. Relative to current law projections, approximately 300,000 individuals would become uninsured in 2016.

State revenues declined during the recent economic recession (December 2007 through June 2009) and have not fully recovered. At the same time, the recession increased the number of individuals meeting Medicaid's income eligibility standards. States are faced with tough decisions about where to direct their increasingly limited funds. This state fiscal condition is a reason the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5; and subsequently extended in P.L. 111-226) included a temporary increase to Federal Medical Assistance Percentage (FMAP) rates. As a condition of the receipt of the federal Medicaid matching funds made available under ARRA, states were required to maintain their Medicaid programs with the same eligibility standards, methodologies, or procedures for Medicaid through June 30, 2011. This provision is referred to as the ARRA Maintenance of Effort (MOE) requirement. The ARRA MOE provisions were extended and expanded in the Patient Protection and Affordable Care Act as modified by the Health Care and Education Reconciliation Act of 2010 (ACA, P.L. 111-148 as modified by P.L. 111-152). ACA's MOE provisions were designed to ensure that individuals eligible for Medicaid or the State Children's Health Insurance Program (CHIP) did not lose coverage in the period between the date of enactment of ACA (March 23, 2010) and the implementation of the state health insurance exchanges (expected in 2014). Because states are prohibited from curbing the cost of Medicaid through restricting eligibility standards due to the MOE requirements included in ARRA and ACA, states have focused cost containment strategies on reducing provider rates, making changes to their benefit packages, or implementing limitations on the use of benefits. However, states want greater flexibility to restrain their Medicaid expenditures through eligibility restrictions. This report summarizes the MOE requirements enacted under ARRA and ACA and what these requirements have meant for states in terms of their actions to restrict Medicaid and/or CHIP eligibility. It also summarizes recent legislative activity to repeal the MOE requirements.

On January 27, 2010, the Securities and Exchange Commission (SEC) voted to provide an interpretive guidance, the Commission Guidance Regarding Disclosure Related to Climate Change (the Guidance), which technically does not create new legal obligations, but clarifies how publicly traded corporations should apply existing SEC disclosure rules to certain mandatory financial filings with the SEC regarding the risk that climate change developments may have on their businesses. The Guidance's release was controversial and prompted legislation in the 112 th Congress to repeal it. To date, no bills have been introduced in the 113 th Congress that address the Guidance. This report (1) briefly describes the Guidance; (2) provides opposing views on the Guidance, including past congressional legislation; (3) summarizes a study on potential corporate costs and benefits of implementing the Guidance; and (4) examines the impact of the Guidance from the perspectives of investors, corporations, and finance professionals. At the opening of the SEC commissioners' vote on the Guidance, then-SEC Chairman Mary Schapiro explained that the Guidance provided "interpretive guidance on existing [public company] disclosure requirements as they relate to business or legislative events on the issue of climate change." As such, the Guidance, which went into effect on February 8, 2010, attempts to give greater specificity to various existing disclosure rules that may require a public company to disclose the impact that business, legal, regulatory, or legislative developments related to climate change may have on its business. This information must meet the test of "materiality"--the notion that information should be disclosed if a reasonable investor would want it in order to make an informed investment decision. Specifically, the Guidance states what companies could be required to disclose in relation to climate change under the corporate disclosure requirements that fall under the SEC's Regulation S-K, including Forms 10-K and 20-F filings. In accordance with the Sarbanes-Oxley Act of 2010 ( P.L. 107-204 ), the SEC must look at one filing from each public company at least once every three years. In part, the Guidance attempts to clarify how certain climate change-related matters should be disclosed under the aforementioned SEC corporate disclosures through providing examples of developments that could trigger such disclosures. Key points expressed in the Guidance include the impact of climate change legislation and regulation, impact of international accords on climate change, indirect consequences of regulation or business trends, and physical impacts of climate change. On the day that the SEC voted to adopt the Guidance, then-SEC Chairman Mary Schapiro, who had voted for adoption, observed, [T]he Commission is not making any kind of statement regarding the facts as they relate to the topic of "climate change" or "global warming." And, we are not opining on whether the world's climate is changing; at what pace it might be changing; or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics.... It is neither surprising nor especially remarkable for us to conclude that of course a company must consider whether potential legislation--whether that legislation concerns climate change or new licensing requirements--is likely to occur. If so, then under our traditional framework the company must then evaluate the impact it would have on the company's liquidity, capital resources, or results of operations, and disclose to shareholders when that potential impact will be material. Similarly, a company must disclose the significant risks that it faces, whether those risks are due to increased competition or severe weather. These principles of materiality form the bedrock of our disclosure framework. Today's guidance will help to ensure that our disclosure rules are consistently applied, regardless of the political sensitivity of the issue at hand, so that investors get reliable information. The vote by the SEC commissioners in favor of the Guidance split 3-2, a vote that reflected two rival perspectives on the merits of the Guidance. Below are examples of views both in support of and in opposition to the Guidance. A Supportive SEC Commissioner. Articulating a view commonly found among many of the Guidance's advocates, Luis A. Aguilar, a Democratic commissioner who voted for it, argued for the Guidance's importance. His stance significantly derived from his view that a clear consensus had been established on the reality of climate change. At the time, his view was also informed by the belief that, given the salience of climate change and the various related legislative and regulatory responses to it, the Guidance would help foster a better understanding of how the SEC's existing disclosure requirements applied to climate change. Climate change, he argued, had become increasingly material to corporate affairs as well as to corporate investors, the disclosures' ultimate beneficiaries: Over two years ago, the Intergovernmental Panel on Climate Change concluded that it is "unequivocal" that the Earth's climate is warming. In October of last year, 13 federal agencies and departments published a coordinated annual report to Congress that reached the same conclusion. It is expected that climate change, if unchecked, will result in severe harm to ecosystems and people around the world. So it is no surprise that regulation of greenhouse gases has the attention of state governments, Capitol Hill, and the Environmental Protection Agency, as well as the attention of investors and companies. Against this backdrop of a changing climate and changing legislative and regulatory landscapes, it is only natural that there are questions about what companies should be disclosing to investors. Today's release is an important step toward answering these questions. By explaining what our existing rules currently require with respect to climate change disclosure, today's release should help companies comply.... Climate change and related governmental action can create risks and opportunities for companies. It is clear that disclosure of this material information will inform and aid investors in their decision making.... This release clarifies that effects resulting from climate change that are keeping management up at night should be disclosed to investors. Additionally, today's interpretive release should facilitate disclosure to investors regarding regulatory restrictions on greenhouse gas emissions that would materially change a company's business and future prospects. A Supportive Group of Institutional Investors. In March 2010, soon after the release of the Guidance, a group called the Investor Network for Climate Risk, a coalition of public pension fund and corporate treasurers, comptrollers, controllers, institutional investors, and asset managers, wrote to then-SEC Chairman Schapiro to lend their support to the guidance. Echoing the views expressed by Commissioner Aguilar, the network stressed that the Guidance would add significant value to corporate disclosures: Climate change already poses significant risks to economies and investments. Many of us have concluded that corporate assessments of the regulatory, physical and litigation risks from climate change are critical in understanding the value of our investments. In response to our efforts to engage companies, more businesses have started to account for the impacts of climate change on their financial performance, while others have pursued opportunities to develop energy-efficient and low-carbon products and services in order to gain market share and improve competitiveness. However, few companies disclose sufficient information about these issues in SEC filings to allow us to make more informed investment decisions. The SEC's new interpretive guidance provides registrants valuable information about how to apply longstanding disclosure requirements to the evolving challenges posed by climate change. Two Supportive Members of Congress D uring the 111 th Congress. In January 2010, during the 111 th Congress, Senator Christopher Dodd, then-chair of the Senate Committee on Banking, Housing, and Urban Affairs, lent his support to the Guidance. Investors have a right to know if their investment may be helped or hurt by severe weather, rising sea levels, or new greenhouse gases regulation or legislation. These new guidelines will help ensure that investors have the guidance they need to make well-informed decisions. At the same time, Senator Jack Reed, then-chair of the Senate Banking Subcommittee on Securities, Insurance, and Investment, expressed similar support: I am pleased the SEC has taken the important step of issuing guidelines regarding climate change disclosure that will increase informational transparency. Climate change is creating new opportunities and risks in the economy. Major environmental risks and liabilities can significantly impact companies' future earnings and, if undisclosed, could impair investors' ability to make sound investment decisions. A Critical SEC Commissioner . At the time, then-SEC Commissioner Katherine Casey cast one of the two dissenting votes against adopting the Guidance. Ms. Casey argued that her opposition largely stemmed from her view that (1) the state of the science and the law underlying the idea of global change lacked certainty; (2) existing SEC disclosure rules were adequate with respect to corporate reporting on environmental change; and (3) while certain interest groups had advocated for such climate change disclosure guidance, the usefulness of the information to most investors from the Guidance was questionable: I believe that the release is premised on the false notion that registrants may not recognize that disclosure related to "climate change" issues may be required. In truth, our disclosure regime related to environmental issues including climate change is highly developed and robust, and registrants are well aware of, and have decades of experience complying with, these disclosure requirements.... There is undoubtedly a constituency that is interested in, and has long pressed the Commission to require, more extensive disclosures on environmental issues in order to drive particular environmental policy objectives. The issuance of this release, however, at a time when the state of the science, law and policy relating to climate change appear to be increasingly in flux, makes little sense.... I do not believe that this release will result in greater availability of material, decision-useful information geared toward the needs of the broad majority of investors. Criticism from an Electrical Utility Industry Trade Group. In the private sector, major criticism of the Guidance came from the Edison Electrical Institute, an electrical utility trade group, which reports that its members are responsible for 60% of the total electricity supplied in the United States. In a July 2010 letter to then-SEC Chairman Schapiro, the group voiced concerns that the SEC Guidance (1) required too much speculation by corporate registrants in areas such as predicting weather patterns, the likelihood of enacting climate-change-related legislation, and potential corporate reputational damage related to climate change; (2) could discourage voluntary disclosures by registrants fearful of liability under securities laws for the contents of such disclosures, which would reduce the total amount of general climate change information provided to investors; and (3) might be interpreted as requiring that corporate management conduct a comprehensive review of climate change-related matters, which could be both unnecessary and excessively burdensome. Critical Responses in Congress . To date, in the 113 th Congress, no legislation involving the climate change guidance has been introduced. However, in both the 111 th and 112 th Congresses, various Members have expressed displeasure with the SEC's Guidance by introducing legislation and through correspondence with the SEC. In the 112 th Congress, Senator John Barrasso and Representative Bill Posey introduced identical bills ( S. 1393 and H.R. 2603 , respectively) that would prohibit the enforcement of the SEC's climate change disclosure guidance. In a joint news release accompanying the introduction of the bills, the Members explained the purpose behind the legislation: In this economy, the SEC's main responsibility should be to protect American investors and maintain fair markets. Instead, it's actually using time and resources on regulating climate change. This is yet another startling example of how the Administration is making it worse for job creators across our country. Our bill blocks the SEC from forcing American employers to conduct burdensome and expensive climate analysis. In March 2010, during the 111 th Congress, Representative Posey was joined by 20 of his House colleagues in writing a letter to Chairman Schapiro to express their opposition to the climate change disclosure guidance. Among the signatories were former Representative Ron Paul and Representative Scott Garrett, currently chair of the Subcommittee on Capital Markets and Government-Sponsored Enterprises of the House Financial Services Committee. Earlier in the 111 th Congress, similar concerns were expressed in a February 2, 2010, letter to Chair Schapiro from Representative Spencer Bachus, then-ranking Member of the House Committee on Financial Services. In his letter, Representative Bachus reportedly observed, With legislative progress on climate change having stalled, this guidance suggests an attempt by the SEC to promote a political agenda through regulation. The guidance reaches beyond the SEC's expertise and will impose potentially significant compliance costs on issuers with little apparent benefit to investors. The Guidance did not address the issue of the added costs or burdens of its implementation. Soon after the Guidance's release, however, a law review article was published that examined the Guidance's potential costs and benefits for corporations. Among other things, the article, An Inconvenient Risk: Climate Change Disclosure and the Burden on Corporations , concluded that (1) in the context of the fairly limited data that exist on climate change risks previously placed in 10-K filings and in existing voluntary disclosure protocols, the Guidance would require expanded disclosure of "all relevant information"; (2) there are legitimate concerns that the added burdens of identifying and measuring climate change-related risk would exacerbate the challenges of determining what disclosures are material; and (3) in the context of potential corporate "maximum liability" for risks related to climate change, the added cost of comprehensively assessing climate change risks as dictated by the Guidance would appear to be justified. The Guidance has been in effect since early February 2010. Several studies examined its impact for the initial year. This section examines three such studies, which reflected, respectively, investor, corporate, and finance perspectives. One impact study after the Guidance's first year was done by Ceres, a nonprofit coalition of institutional investors, environmental organizations, and other public interest groups. Ceres works with companies to address what it calls sustainability challenges, such as global climate change and water scarcity. Ceres was also one of several entities that petitioned the SEC in 2007 to "issue an interpretive release clarifying that material climate-related information must be included in corporate disclosures under existing law." Other entities included the California Public Employees' Retirement System, California state controller, Friends of the Earth, New York City comptroller, New York state attorney general, Rhode Island general treasurer, Vermont state treasurer, North Carolina state treasurer, and Maine state treasurer. The SEC Guidance essentially reflects many of the recommendations from the 2007 petition. Ceres has also been responsible for several reports that examined public company disclosures after the Guidance went into effect. Three such efforts are described below. A 2011 report by Ceres, Disclosing Climate Risks & Opportunities in SEC Filings: A Guide for Corporate Executives, Attorneys & Directors , examined various public company disclosures after the Guidance went into effect, with a focus on the quality of climate change risk disclosures from an investor perspective. The study's central conclusion was that most corporate filers needed more experience at communicating the risks associated with climate change. Overall, it found that large public companies have improved their climate change risk disclosures in recent years, but recommended that more work be done. In assessing the quality of companies' disclosures, Ceres rated such disclosures as either good --detailed disclosure of the financial impacts of existing and proposed regulatory requirements on the company; fair --disclosure of regulatory risk discusses legislation and its possible effects on the company, but makes no attempt at quantifying or assigning a value to the risks, or fails to place such values in a meaningful context; or poor --disclosure of regulatory risks does not mention existing or proposed regulations, or mentions them without analyzing possible effects on the company. The study concluded that good climate change risk disclosures were rare and that the vast majority of climate change risk disclosures were either fair, poor, or involved no such disclosure. Summarizing its findings, Ceres observed, Although public companies' climate reporting has improved somewhat in recent years, it remains true that disclosures very often fail to satisfy investors' legitimate expectations. Ensuring adequate disclosure will require commitment from management, as well as continued attention from regulators - and it will require that investors continue to make their needs heard. Greater attention to risks and opportunities will help companies themselves, and improved disclosure will help investors and the broader public. Released on June 18, 2012, the Ceres report, Clearing the Waters: A Review of Corporate Water Risk Disclosure in SEC Filings , examined corporate disclosure with respect to water risks in an attempt to ascertain how such disclosures have evolved between 2009 and 2011, a year after the Guidance was issued. For example, the report looked at changes in water risk disclosures of 82 companies in the beverage, chemicals, electric power, food, homebuilding, mining, oil and gas, and semiconductors sectors. Among other things, the report found that there had been a large increase in the number of analyzed companies that disclosed their exposure to water risk in 2011 over those that did so in 2009. It reported that a significant focus of the corporate disclosures involved reporting of water-related physical risks. Eighty-seven percent of the companies it analyzed in 2011 reported that they disclosed such risks, up from the 76% that did so in 2009 before the release of the Guidance. Within this, the percentage of companies in the oil and gas and chemicals sectors reporting water-related physical risks grew from 31% in 2009 to 45% in the 2011 disclosures. The report also observed that while overall disclosure improved between 2009 and 2011, there was still a dearth of disclosed data on water use and the financial implications of water-related risks. Arguing for the importance of such disclosures, it observed that it helped "investors understand the exposure of their portfolio companies to current and future water stress, as well as potential regulatory developments." The report recommended that companies boost their use of quantitative data (e.g., water use data, the proportion of operations affected by new regulations, the extent of financial losses from drought, or cost reductions through innovations or advances in efficiencies) as well as qualitative disclosures. It also recommended that companies bolster their use of performance targets, and risk management disclosures to better explain the nature of their responses to water-related risks. Another Ceres publication, Sustainable Extraction? An Analysis of SEC Disclosure by Major Oil & Gas Companies on Climate Risk and Deepwater Drilling Risk , was released in August 2012. The report examined the quality of material climate risk and deepwater drilling risks in the 2010 annual financial filings as disclosed in 2011 among 10 of the world's largest publicly held oil and gas companies, Apache, BP, Chevron, ConocoPhillips, Eni, ExxonMobil, Marathon, Shell, Suncor, and Total. Among other things, in the area of climate risk disclosure, it found that none of the corporate disclosure warranted an excellent rating because no company provided reporting of that quality; while the companies are broadly involved in undertaking extensive capital investments related to climate change and deepwater drilling, which carry material financial risks, they are generally deficient in properly disclosing them in ways that are consistent with SEC rules and investor needs; of a total of 60 climate disclosure ratings (described above) given by Ceres, only 5 were rated good and 34 (more than half) merited a poor rating or were simply not disclosed; while all the companies reported some disclosures on regulatory risks and indirect risks, they exhibited significant range in terms of specificity, comprehensiveness, and the quality of analysis; and 6 of the 10 companies provided no disclosures and 3 provided poor disclosures. With respect to deepwater drilling risk disclosures, the report found that out of 50 deepwater drilling risk disclosure ratings given, 4 merited a good rating, and 29 were rated either poor or involved no disclosure; after the Gulf of Mexico oil drilling disaster, disclosure on drilling and safety generally remained weak, including disclosures related to drilling risk management and spill response strategy; 8 out of 10 of the companies disclosed minimal or no information on safety or environmental statistics; and 8 out of 10 of the companies disclosed minimal or no information regarding their investments in safety-related research and development. Overall, for both climate risk and deepwater drilling disclosures, the report concluded that its "findings are concerning, and demonstrate the need for oil and gas companies to better align their climate risk and deepwater drilling risk disclosure with SEC rules and investor expectations." Another study on the impact of the Guidance was published by Davis Polk & Wardwell, a law firm with a significant corporate securities practice. The study, Environmental Disclosure in SEC Filings, 2011 Update , examined a large number of 2010 corporate disclosure filings after the Guidance's first year. Some of its findings were as follows: Despite concerns of some critics that the Guidance would lead to extraneous and unimportant disclosure that might distract investors from focusing on significant disclosures, the Guidance did not appear to have had as significant an impact on disclosure as various critics had feared. Disclosures appeared to feature more generic weather risk factors. New disclosures emerged on potential changes in demand for products and services and on increases in fuel prices. There was relatively little disclosure of actual or potential reputational harm that may result from climate change. Companies in greenhouse gas intensive industries, especially energy companies, have expanded their disclosure. For example, they have added longer factual updates of legislative, regulatory, and litigation developments. Left unclear, however, was whether the increase in energy company climate change-based disclosure was largely due to the Guidance, earlier electric utility settlements with the office of the New York attorney general, or the historical growth in climate change regulation in general. Davis Polk & Wardwell took a granular approach in its study of post-guidance filings by focusing on the nature of individual filings. By contrast, an article in an American Bar Association (ABA) newsletter looked at (1) changes in the number of climate change-related disclosures during the Guidance's first year; and (2) the views of corporations and finance professionals on those disclosures. Among other things, Davis Polk found that prior to the Guidance in 2009, of the 75,000 Form 10-Ks filed with the SEC, about 800, or 1.8%, included some reference to climate change or greenhouse gas. Immediately after the Guidance in the first quarter of 2010, the article in the ABA newsletter observed a significant increase in the percentage of such filings to 2.8%. However, by the third quarter of the year, it found that the percentage of climate change or greenhouse gas referenced in 10-K filings had fallen below the 2009 level to 1.6%. In addition, in its survey of how various corporations and finance professionals thought about the disclosures, the article also reported the following: Many companies saw little upside and even less downside in climate change disclosures. Many companies saw no meaningful business opportunities coming from climate change disclosures, but felt that they carried a potential for creating risks. Often disclosing uncertain climate change-related information was frequently seen as a speculative process that was driven by guidelines that lacked any recognized standards or had not resulted in any standardized practices. Investor relations professionals reportedly observed a general lack of interest in climate change from the financial community or other constituencies. Financial analysts had generally shown a small amount of interest in climate change-related issues. About half of the asset managers surveyed indicated that they did not analyze climate risks because no investor clients requested that they do so. Many companies appeared to believe that there were few, if any, penalties from the SEC for nondisclosure of climate change matters, a perception that was reinforced by observations that also characterized the SEC's level of enforcement in this area as negligible.

Publicly traded companies are required to transparently disclose material business risks to investors through regular filings with the Securities and Exchange Commission (SEC). On January 27, 2010, the SEC voted to publish Commission Guidance Regarding Disclosure Related to Climate Change (the Guidance), which clarifies how publicly traded corporations should apply existing SEC disclosure rules to certain mandatory financial filings with the SEC regarding the risk that climate change developments may have on their businesses. The Guidance has been controversial and prompted legislation in the 112th Congress to repeal it. Proponents of the Guidance, including several union and public pension funds, argued that it was necessary because a consensus has been established on the reality of climate change and that, given the salience of climate change and the various related legislative and regulatory responses to it, the Guidance would help foster a better understanding of how the SEC's existing disclosure requirements applied to it. Some that oppose the Guidance, including several business interests, have argued that the current state of the science and the law underlying the idea of global climate change remains uncertain; existing SEC disclosure rules are adequate with respect to corporate reporting on environmental change; and while certain interest groups had advocated for such climate change disclosure guidance, the climate change disclosure guidance's usefulness for most investors is unclear. In the 112th Congress, Senator John Barrasso and Representative Bill Posey introduced identical bills (S. 1393 and H.R. 2603, respectively) that would prohibit the enforcement of the SEC's climate change disclosure guidance. To date, in the 113th Congress, no bills involving the Guidance have been introduced. Since the Guidance went into effect on February 8, 2010, there have been several attempts to gauge its impact. For example, a 2011 report from Ceres, a nonprofit coalition of institutional investors, environmental organizations, and other public interest groups, concluded that most corporate filers needed more experience at communicating the risks associated with climate change. Although it found that large public companies had improved their climate-change risk disclosures in recent years, the report concluded that there was more work to be done in this area. A report from the law firm of Davis Polk & Wardwell found that the Guidance did not appear to have had as significant an impact on disclosure as some had expected; that new disclosures emerged involving potential changes in demand for products and services and increases in fuel prices; and that there was little disclosure of actual or potential reputational harm that might result from climate change. A study published for the American Bar Association found that many companies reported seeing little upside and even less downside in climate change disclosures. It also found that many companies reported few meaningful business opportunities resulting from climate change disclosures, which instead carried a potential for creating risks. In addition, many companies indicated that disclosing frequently uncertain climate change-related information was often a very speculative process and that there were few, if any, penalties from the SEC for nondisclosure of climate change matters. This perception was underscored by other observations that characterized the SEC's level of enforcement in this area as negligible. This report will be updated as events warrant.

By mid-March of 2008, gasoline prices exceeded $3.39/gallon (gal) while diesel fuel prices were $3.97/gal, a differential of almost $0.60/gal. In mid-March of 2007, the relationship between the two fuels was the reverse: gasoline prices were higher than diesel prices. At that time, diesel prices were roughly $2.68/gal, while the average price of gasoline for all grades was $2.76--more than $0.08 higher than the average price of on-highway diesel. Additionally, where gasoline prices in mid-March 2008 are roughly $0.63/gal higher than year-ago averages, diesel fuel prices have risen over $1.29/gal over the same period. Over $0.60/gal of this increase has occurred since the beginning of 2008. This has prompted questions of why the historic gap between gasoline and on-highway diesel prices has widened so greatly and over such a relatively brief period of time. Because diesel fuel costs affect the cost of shipping by truck, price increases affect the delivered cost of most consumer goods purchased in the United States, contributing to the over-all level of price inflation. This report provides background and identifies some of the likely factors and forces in world markets that may have contributed to the evolution of the relative prices of gasoline and diesel fuel over the past several years. Among these are strong international demand for diesel fuel; product mix decisions by refiners, and refinery investment to meet more stringent limits on the sulfur content of diesel fuel; the similarities between diesel fuel and home heating oil; and the effect on retail prices from local market conditions. A barrel of crude oil is a composite of hydrocarbons of varying densities. The initial step in refining crude oil is to separate its heavier and lighter "fractions" by heating it. The lighter products are recovered at, or near the top of a distillation column where the temperature is lowest. The heavier fractions are recovered from the bottom where the heat is greatest. Gasoline is among the lighter components. Diesel fuel and home heating oil come from the portion of the barrel that is termed "middle distillates" because the feedstock for these fuels settle out roughly in the middle of the distillation tower. Crude oil itself is of varying densities, as well as sulfur content, generally distinguished as "light" or "heavy," or high and low quality oil. Light crude will furnish a higher percentage of lighter products than heavy crude; additional processing can increase the yield of lighter products from the heavier end of the barrel, but will add to product costs. Once distilled, gasoline and middle distillates are further processed "downstream," where the addition of blending components and other steps create the finished petroleum products that are released to markets. The typical yields from a barrel of crude oil of gasoline and middle distillates range, respectively, around 45-47% and 25-27% depending on the time of year (see Table 1 ). Typically, refiners take some of their facilities offline for brief periods to perform maintenance and make seasonal adjustments to slightly favor the yield of gasoline or middle distillates. During the spring, refiners seek to build inventories of gasoline for the summer driving season. Conversely, production of home heating oil for the heating season is maximized beginning during the summer. Gasoline consumption has been averaging 9.0 million barrels daily (mbd), while all distillate consumption is roughly 4.5 mbd. In 2007, U.S. imports of middle distillates averaged 348,000 b/d in 2007. As is discussed later in this report, world demand for middle distillates has grown and added to the pressure on prices for middle distillate imports. The typical product yield from a barrel of crude oil is shown in Table 1 . As is also noted later in this report, some of the sharp runup in on-highway diesel fuel prices in recent months likely stems from the close similarity between diesel fuel and residential home heating oil. Both, as has been noted, are middle distillates and, to some extent, in competition with one another. Home heating oil and transportation diesel are chemically identical, but in the refinery they are processed in slightly different ways for their respective purposes. In addition to having specified regulations and taxes, transportation diesel has a low sulfur standard, meaning that it must contain 0.05% sulfur or less. Home heating oil is required by law to contain not more than 0.5% sulfur content, but due to unintentional mixing of transportation diesel and home heating oil at the refinery, the sulfur content of home heating oil usually hovers around 0.2%. Table 2 shows recent demand for products that fall within the parameters of distillate fuels. In 2006, diesel fuel represented nearly 63% of distillate sales while residential home heating oil was 8% of sales. This is compared with 58% and 10.8%, respectively, in the year 2002. Table 2 also suggests that the distillate fuel market in the United States is not a growth market. The total demand for distillates was no higher in 2006 than in 2003, and less than 2% higher than the weak demand year of 2002. On-highway diesel was the only sector that showed continuous growth over the period. Other sectors, like residential and commercial, suggest seasonality related to the weather. Some sectors, like vessel bunkering, electric power, and military showed declining demand. Differing sectoral demand patterns within the same product group makes it likely that, in pricing terms, those sectors with the relatively strongest demand patterns might be charged prices which help to offset the lower returns that might be earned in sectors with weaker demand. For example, since all of the distillates are joint products of the refining process, all must find a market. However, if one segment of the market, say use in electric power generation, is relatively weak and declining, and another, on-highway use is increasing, it is likely that electric power distillates may be sold at a discount, while on-highway distillates may be sold at a premium. The retail prices of gasoline and diesel fuel have four major components: the price of the crude feedstock; federal and state taxes; the cost of refining, reflected in what is referenced as the "refiner margin"; and the costs of distribution (transportation) and marketing. As the price of crude rises or fluctuates, along with any demand pressures, the relative percentage share of these components of retail price will shift. The observed drop in the share represented by state and federal taxes--values that are constants over the period shown below--is a reflection of the significant change in the retail sales price for gasoline and diesel fuel. These percentages for the last year for both gasoline and diesel fuel are set out in Tables 3 and 4 , and depicted as graphs in Figures 1 and 2 . Tables 3 and 4 suggest that the reason for the shift in the relative prices of gasoline and diesel fuel cannot be easily be identified through cost growth at any particular stage of the production process. However, part of the explanation may be in the behavior of refining as a percentage of price. The decline in refining cost in gasoline has been greater than the decline in refining cost in diesel. This pattern suggests that the ability of refiners to pass through cost increases to the consumer is stronger in diesel than in gasoline, and that there are significant recoverable costs that have been added in diesel refining. Both may play a role. As is discussed later in this report, mandated refinery investments have been required in diesel fuel refining to meet new product specifications. On the demand side, the second half of 2007 and early 2008 have been characterized by record-setting crude oil prices. Gasoline prices lagged the increase in crude oil prices, leading to shrinking refiner margins and profitability. Possibly, because diesel fuel is an intermediary product in commercial use, and as such can be expected to be passed through to final consumers, refining costs as a percentage of cost remained stronger. It is expressly because refiners often absorb the initial increases in crude prices that some are predicting that, if crude prices remain roughly in their current range or go higher, further price increases in all highway fuels are likely. How steep these increases may prove to be will depend very critically on the demand response to the price of motor fuels. Gasoline demand is recently observed to be relatively flat, and stocks of gasoline are unseasonably high. However, with the start of the summer driving season still some weeks off, any prediction about the price, supply, and demand for gasoline (and diesel fuel) during the summer of 2008 would be conjecture at best. A variety of factors, some cyclical, and some structural, have likely contributed to the break-down of the traditional pattern of relative prices between gasoline and diesel fuel. These are identified and described in turn. Growing petroleum product demand, including demand for diesel fuel, in China, Europe, and the United States has put pressure on the ability of refineries to meet production requirements. Demand growth in China is primarily tied to the level of economic growth, expanding both industrial and consumer demand. While the over-all growth in petroleum demand in Europe has not been high, demand for diesel fuel over gasoline has increased. The European automobile and light truck fleet has moved in the direction of diesel fuel. In the United States, the demand for gasoline has continued to increase. Even though crude oil prices have risen since 2004, demand for gasoline in the United States over the same period continued to increase. In a world market where the major producers sell their products in virtually every geographic and product segment, price effects will have a tendency to move from one part of the market to another. If strong demand for diesel fuel exists in Europe and places upward pressure on prices, the effect is also likely to be felt in the U.S. market. Even if it were possible to wall off the U.S. market from higher prices, it is unlikely that it would be helpful. If a price spread between gasoline and diesel, greater than the cost of shipping, develops between Europe and the United States, a major oil company might be inclined to draw diesel fuel from the U.S. market and sell it in Europe to earn a greater profit. The potential for transactions of this type transmit price increases from one geographic market to others, even if the trade flow does not occur. U.S. imports of diesel fuel have been in the 200 to 400 thousand barrels per day range since 2004. If the import price of diesel fuel exceeds the domestic price of the same fuel, and given that in the market all product is sold at the same price, all prices will rise to the level of the higher cost imported fuel. In terms of the example cited above, tight demand and supply conditions in the European diesel fuel market are transmitted to the U.S. markets as prices tend to equalize. U.S. refinery utilization rates in recent years have been high, generally at or near 90%, reflecting strong domestic demand for most petroleum products. The product mix has generally been optimized to produce a maximum amount of gasoline. This could be true even in times when the price of diesel fuel is above the price of gasoline. Record profit levels in the oil industry have increased public scrutiny of oil company operations. Although prices of all petroleum products have been high, and market conditions tight, physical shortages of transportation fuels have not been generally observed. If the general motoring public had to confront high gasoline prices at the same time that physical shortages were developing, the pressure to tax or regulate oil company profits and product prices might grow. As a result, it may be that a major priority of the oil companies supplying the U.S. market is to avoid shortages. To avoid shortages, the U.S. imports gasoline and gasoline blending components. These imports now generally exceed 1 million barrels per day, augmenting domestic gasoline production, and avoiding the likelihood of physical shortages of gasoline. A possible result of maximizing gasoline output at the refinery may be to make the supply of diesel fuel relatively less available when compared to any particular level of demand, resulting in stronger upward pressures on diesel fuel prices compared to gasoline prices. In this way, even though all petroleum product prices are rising due to the increasing price of crude oil, the relative prices of diesel fuel and gasoline could shift because of an emphasis on gasoline production. The Environmental Protection Agency (EPA) in 2001 promulgated new rules concerning the sulfur content of diesel fuel that began to go into effect in 2006. Ultra low sulfur diesel (ULSD) contains 15 parts per million of sulfur, compared to 500 parts per million or more in uncontrolled diesel fuel. Refineries were to begin producing 80% of their output of diesel fuel as ULSD in June 2006, with availability at fuel outlets for on-highway use by October 2006. Because the sulfur content is measured at the pump according to EPA regulation, special transportation and distribution systems were also needed to avoid fuel contamination. Use of reduced sulfur diesel for off-highway purposes began in 2007, with full implementation of ULSD by 2010. The American Petroleum Institute estimated that over $8 billion have been spent by refiners to acquire and implement refinery processes for sulfur removal. In addition, hundreds of millions of dollars have been spent to upgrade transportation and distribution systems. These investment costs to meet federal regulation are likely to be passed on to consumers in the form of higher diesel fuel prices. These investment costs increase the refinery cost component of diesel fuel, and if the refiners allocate costs specifically to the cost-generating product, diesel prices should rise relative to gasoline prices. Home heating oil and diesel fuel are essentially the same product from the refining point of view, and as such, their prices are related in the market. As a result, peaking demand for home heating oil in cold months can have an effect on the price of diesel fuel. For parts of the United States, the winter of 2007-2008 was colder than usual. Heating oil prices reached a record price of $3.55 per gallon for the week ending March 3, 2008. This record price represented an increase of almost 9 cents from the previous week. These prices represented higher than a year-ago prices for the 22 nd consecutive week this heating season. Heating oil demand and high prices have likely contributed to the increases observed in diesel fuel prices. In addition, the linkages between the domestic diesel fuel market and international markets suggest that cold weather which increases heating oil demand anywhere in the world is likely to contribute to higher heating oil and diesel fuel prices in the United States. In a market economy, sellers of a commodity may set prices at whatever level they think the market will bear. Consumers respond by adjusting their level of purchases. If the consumer's demand is inelastic, or insensitive to price, then sellers have an incentive to charge higher prices. Transportation demand, and hence the demand for fuels including gasoline and diesel fuel, is thought to be relatively price insensitive in the short term. In addition, since diesel fuel is used for mostly business purposes in the United States, it may be treated as an intermediate good; one that is a cost component of a production process leading to some final consumer good or service. As such, any increases in diesel fuel costs are likely to be passed on to the ultimate consumers. If costs can be passed on through a pricing process, there is little need for those who use the product to make adjustments as a result of higher costs. Although gasoline and diesel fuels are joint products of the refining process, refining companies have the right to apportion the costs of production to segments of the product mix in whatever blend they choose. Refiners may choose to change relative prices within the product mix to take advantage of demand conditions, to alter the composition of demand to match available supply, or simply as a strategy to increase shareholder value. On the basis of the market dynamics described in this report, the future price path of highway fuels and the relative disparity between the price of gasoline and diesel fuel cannot be predicted with any confidence. At this time, the price support for diesel fuel is primarily demand-driven, with the United States competing for world supply to supplement domestic production of middle distillates with product imports. It could be anticipated that, at some point, the price of a fuel could reach a level where there is some demand response. It is unclear what these price points may be. However, owing to the primary use of diesel fuel in the commercial sector for the delivery of goods and some services, demand for diesel is likely to be less elastic because, as has been noted, those costs will be passed on to consumers. Demand outside the United States may also prove to be less elastic. A supply response could ameliorate prices somewhat, but any supply response is bounded by the nature of crude oil and refinery investment.

Over time, gasoline has typically been more expensive than diesel fuel. However, their relative prices have now reversed. In mid-March of 2008, gasoline prices exceeded $3.39/gallon (gal) while diesel fuel prices were above $3.97/gal, a differential of almost $0.60/gal. This has prompted questions of why the historic gap between gasoline and on-highway diesel prices has widened so greatly and over such a relatively brief period of time. Crude oil, when refined, produces a mix of products. Diesel fuel and home heating oil are derived from the portion of the barrel that produces what are termed "middle distillates." Another part of the barrel furnishes the feedstock for gasoline. Refiners process barrels of crude oil of differing quality, depending on the relative prices for oil of different qualities, and their available technology. Within technology-defined limits refiners can vary the proportions of middle distillate and gasoline production. Because the entire range of petroleum products derive from the same barrel, it is difficult to attribute general refining costs to any single product, making it also difficult to ascertain the relative cost proportions. The exception to this would be when the investment costs of changing product specifications to meet seasonal or environmental requirements can be measured. A number of specific factors may be identified that have contributed to the shifting relative prices of gasoline and diesel fuel. It is important to recognize that the U.S. market for these fuels is part of a broader world market. World demand patterns are shifting as diesel fuel becomes a primary consumer transportation fuel in Europe and other parts of the world. World price differentials are transmitted to the U.S. market. Other factors affecting diesel prices include refinery investment costs, as well as investment costs in the product distribution system to accommodate new specifications for diesel fuel that require lower allowable sulfur content; the seasonality of home heating oil demand, a similar product, which transmits the price effects of cold weather from the heating market to the on-highway diesel fuel market; world market effects that might affect the pricing and output mix decisions of refiners; and circumstances affecting the local market at point of purchase. One other factor should be noted. The primary demand sectors for gasoline and diesel fuel are different in the United States. Gasoline is a mass consumer good and home heating oil an important regional and seasonal residential product, while diesel fuel is used in a wide variety of commercial and industrial applications. Diesel fuel is often part of the cost of delivering goods and providing services. As a consequence, demand for diesel fuel may be less elastic, and therefore, likelier to be passed on to consumers.

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act, P.L. 93-288 ) authorizes the President to issue major disaster declarations in response to certain incidents that overwhelm the capabilities of tribal, state, and local governments. The Stafford Act defines a major disaster as any natural catastrophe (including any hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought), or, regardless of cause, any fire, flood, or explosion, in any part of the United States, which in the determination of the President causes damage of sufficient severity and magnitude to warrant major disaster assistance under this chapter to supplement the efforts and available resources of states, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused thereby. Major disaster declarations can authorize several types of federal assistance to support response and recovery efforts following an incident. The primary source of funding for federal assistance following a major disaster is the Disaster Relief Fund (DRF), which is managed by the Federal Emergency Management Agency (FEMA). While this fund also provides assistance as a result of emergency declarations and Fire Management Assistance Grants, major disaster declarations historically account for the majority of obligations from the DRF. This report provides a national overview of actual and projected obligations funded through the DRF as a result of major disaster declarations between FY2000 and FY2015. In addition to providing a national overview, the electronic version of this report includes links to CRS products that summarize actual and projected obligations from the DRF as a result of major disaster declarations in each state and the District of Columbia. Each state profile includes information on the most costly incidents and impacted localities. In both the national and state-level products, information is provided on the types of assistance that have been provided for major disasters. Many other federal programs that provide assistance following a major disaster are not funded through the DRF. While the specific agencies and programs called upon will vary from one disaster to another, an overview of selected programs can be found in CRS Report R42845, Federal Emergency Management: A Brief Introduction , coordinated by [author name scrubbed]. A total of 936 major disaster declarations were made between FY2000 and FY2015. These declarations resulted in more than $133.6 billion in actual and projected obligations from the DRF. There was a high level of variation in the amount of actual and projected funding obligated for major disasters each year, with more than $48.6 billion in actual and projected obligations for disasters in FY2005 alone. Figure 1 displays the actual and projected obligations for all major disaster declarations each fiscal year. In Figure 1 , obligations associated with each declaration are reported in the fiscal year in which the major disaster was declared. However, disaster response and recovery expenses are often incurred over several years following an incident, including some of the incidents from FY2000 to FY2015. To account for the total amount of federal assistance ultimately obligated for major disasters, the obligations data used throughout this report reflect actual obligations as well as obligations projected under FEMA-approved spending plans. A major disaster declaration can authorize funding for different purposes, depending on the needs of the state. These purposes include the following: Public Assistance , which is used by tribal, state, or local governments, or certain private nonprofit organizations to provide emergency protective services, conduct debris removal operations, and repair or replace damaged public infrastructure; Individual Assistance , which provides direct aid to impacted households; Hazard Mitigation Assistance , which funds mitigation and resiliency projects and programs, typically across the entire state; FEMA administrative costs associated with each disaster declaration; and Mission Assignment , which tasks and reimburses other federal entities that provide direct disaster assistance. The decision concerning which types of assistance to provide is made either when the major disaster is declared or when the declaration is amended. For many major disasters, all of the assistance types outlined above are authorized. For others, some assistance types are not authorized. Figure 2 compares the actual and projected obligations for different types of assistance provided as a result of a major disaster declaration from FY2000 to FY2015. In addition to the major disaster assistance described above, there are other forms of assistance that are funded through the DRF. These include assistance associated with Emergency Declarations and with Fire Management Assistance Grants. The funding associated with these types of assistance typically results in lower obligation levels than assistance provided as a result of major disaster declarations, although there is significant variation across incidents. Emergency Declarations are often made at the time a threat is recognized in order to assist tribal, state, and local efforts prior to an incident. For the period FY2000 through FY2015, total obligations for emergency declarations were just over $2.37 billion. Fire Management Assistance Grants (FMAGs) provide aid for the control, management, and mitigation of fires. Total obligations for FMAGs from FY2000 through FY2015 were slightly more than $1.21 billion. Floods represent a majority of all major disaster declarations nationwide. One of the primary sources of assistance for flooding events is the National Flood Insurance Program (NFIP), which is not funded through the DRF. For more information on the NFIP, please refer to CRS Report R44593, Introduction to FEMA's National Flood Insurance Program (NFIP) , by [author name scrubbed] and [author name scrubbed]. Many existing CRS products address issues related to the DRF, the disaster declaration process, and types of DRF assistance. Below is a list of several of these resources: CRS Report R41981, Congressional Primer on Responding to Major Disasters and Emergencies , by [author name scrubbed] and [author name scrubbed] CRS Report R43519, Natural Disasters and Hazards: CRS Experts , by [author name scrubbed] and [author name scrubbed] CRS Report R43784, FEMA's Disaster Declaration Process: A Primer , by [author name scrubbed] CRS Report R43537, FEMA's Disaster Relief Fund: Overview and Selected Issues , by [author name scrubbed] CRS Report R44619, FEMA Disaster Housing: The Individuals and Households Program--Implementation and Potential Issues for Congress , by [author name scrubbed] CRS Report R43990, FEMA's Public Assistance Grant Program: Background and Considerations for Congress , by [author name scrubbed] and [author name scrubbed] In the electronic version of this report, Table 1 includes links to CRS products that summarize major disaster assistance from the DRF for each state and the District of Columbia. Actual and projected obligations from the DRF as a result of major disaster declarations for tribal lands, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, the Virgin Islands, the Federated States of Micronesia, the Marshall Islands, and the Republic of Palau are available upon request.

The primary source of funding for federal assistance authorized by a major disaster declaration is the Disaster Relief Fund (DRF), which is managed by the Federal Emergency Management Agency (FEMA). Major disaster declarations have occurred in every U.S. state since FY2000, with obligations for each incident ranging from a few hundred thousand dollars to more than $31 billion. This report summarizes DRF actual and projected obligations as a result of major disaster declarations at the national level for the period FY2000 through FY2015. CRS profiles for each state and the District of Columbia are linked to this report. Information on major disaster assistance from the DRF for tribal lands, U.S. territories, and freely associated states is available upon request. This report also includes lists of additional resources and key policy staff who can provide more information on the emergency management issues discussed.

In the last few years, the United States has considered bilateral and regional free trade areas (FTAs) with a number of trading partners. Such arrangements are not new in U.S. trade policy. The United States has had a free trade arrangement with Israel since 1985 and with Canada since 1989. The latter was suspended when the North American Free Trade Agreement (NAFTA) that included the United States, Canada, and Mexico went into effect in January 1994. U.S. interest in bilateral and regional free trade arrangements surged, and the Bush Administration accelerated the pace of negotiations after the enactment of the Trade Promotion Authority in August 2002. U.S. participation in free trade agreements can occur only with the concurrence of Congress. In addition, FTAs affect the U.S. economy, with the impact varying across sectors. The 112 th Congress and the Obama Administration faced the question of whether and when to act on three pending FTAs--with Colombia, Panama, and South Korea. Although the Bush Administration signed these agreements, it and the leaders of the 110 th Congress could not reach agreement on proceeding to enact them. No action was taken during the 111 th Congress either. In addition, the Trade Promotion Authority (TPA) expired on July 1, 2007, meaning that any new FTAs agreed to would not likely receive expedited legislative consideration, unless the authority is renewed. After discussion with congressional leaders and negotiations with the governments of Colombia, Panama, and South Korea to assuage congressional concerns regarding treatment of union officials (Colombia), taxation regimes (Panama), and trade in autos (South Korea), President Obama submitted draft implementing legislation to Congress on October 3, 2011. The 112 th Congress approved each of the bills in successive votes on October 12, along with legislation to renew an aspect of the Trade Adjustment Assistance (TAA) program. In the meantime, on November 14, 2009, President Obama committed to work with the current and prospective partners to form the Trans-Pacific Partnership (TPP) Agreement. The TPP is a free trade agreement that includes nations on both sides of the Pacific. The TPP grew out of an FTA that included Brunei, Chile, New Zealand, and Singapore. Besides the United States, Australia, Canada, Japan, Malaysia, Mexico, Peru, and Vietnam have also joined the negotiations. Furthermore, the United States is negotiating with the European Union to form the Transatlantic Trade and Investment Partnership (TTIP). FTAs raise some important policy issues: Do FTAs serve or impede U.S. long-term national interests and trade policy objectives? Which type of an FTA arrangement meets U.S. national interests? What should U.S. criteria be in choosing FTA partners? Are FTAs a substitute for or a complement to U.S. commitments and interests in promoting a multilateral trading system via the World Trade Organization (WTO)? What effect will the expiration of TPA have on the future of FTAs as a trade policy strategy? This report will monitor pending and possible proposals for U.S. FTAs, relevant legislation, and other 113 th Congress interest in U.S. FTAs. Free trade areas are part of the broad category of trade arrangements under which member-countries grant one another preferential treatment in trade. Preferential trade arrangements include the following: free trade areas (FTAs), under which member countries agree to eliminate tariffs and nontariff barriers on trade in goods within the FTA, but each country maintains its own trade policies, including tariffs on trade outside the region; customs unions , in which members conduct free trade among themselves and maintain common tariffs and other trade policies outside the arrangement; common markets , in which member countries go beyond a customs union by eliminating barriers to labor and capital flows across national borders within the market; and economic unions , where members merge their economies even further by establishing a common currency, and therefore a unified monetary policy, along with other common economic institutions. The European Union is the most significant example of a group of countries that has gone from a customs union to an economic union. The process of forming an FTA usually begins with discussions between trading partners to ascertain the feasibility of forming an FTA. If they agree to go forward, then the countries undertake negotiations on what the FTA would look like. At a minimum, participants in an FTA agree to eliminate tariffs and some other nontariff trade barriers and agree to do so over a specific time period. In addition, the partner countries usually agree on rules of origin, that is, a definition of what constitutes a product manufactured within the FTA and, therefore, one that is eligible to receive duty-free and other preferential trade treatment. Rules of origin prevent products from nonmembers entering an FTA market over the lowest tariff wall. Most FTAs also include procedures on the settlement of disputes arising among members and rules on the implementation of border controls, such as product safety certification and sanitary and phytosanitary requirements. Most recent FTAs contain rules on economic activities besides trade in goods, including foreign investment, intellectual property rights protection, treatment of labor and environment, and trade in services. The size and complexity of the FTA will largely reflect the size and complexity of the economic relations among the participating countries. U.S. FTAs with Israel and Jordan are relatively basic, while the NAFTA (the United States, Canada, and Mexico) is very complex. Countries form free trade areas for a number of economic and political reasons. Most basically, by eliminating tariffs and some nontariff barriers, FTAs permit the products of FTA partners easier access to one another's markets. The 1989 FTA between the United States and Canada was formed arguably for this purpose. Developed countries have also formed FTAs with developing countries to encourage them toward trade and investment liberalization. FTAs may be used to protect local exporters from losing out to foreign companies that might receive preferential treatment under other FTAs. For example, some supporters of the U.S.-Chile FTA argued that U.S. firms were at a disadvantage vis-a-vis their Canadian competitors whose exports face no Chilean tariffs under the Canada-Chile FTA. Slow progress in multilateral negotiations has been another impetus for FTAs. For example, when the 1986-1994 Uruguay Round negotiations got bogged down, the impetus for the United States, Mexico, and Canada to form NAFTA seemed to increase. Arguably, the surge in FTA formation worldwide in the past few years has been a result of the difficulties encountered in launching and implementing the Doha Development Agenda round of negotiations in the WTO. Political considerations are also a motivation to form FTAs. The United States formed FTAs with Israel and with Jordan to reaffirm American support of those countries and to strengthen relations with them. Post-World War II trade policy under various presidential administrations has had several interrelated objectives. One has been to secure open markets for U.S. exports. A second has been to protect domestic producers from foreign unfair trade practices and from rapid surges in fairly traded imports. A third has been to control trade for foreign policy and national security reasons. A fourth objective has been to help foster global trade to promote world economic growth. In fulfilling these objectives, U.S. political leaders have formed and conducted trade policy along three tracks. One track has been the use of multilateral negotiations to establish and develop a rules-based trading system. The United States was a major player in the development and signing of the General Agreement on Tariffs and Trade (GATT) in 1947. It was a leader in nine rounds of negotiations that have expanded the coverage of GATT and that led to the establishment in 1995 of the World Trade Organization (WTO), the body that administers the GATT and other multilateral trade agreements. The United States has continued this approach as a leader in the latest round--the Doha Development Agenda (DDA). U.S. policy makers have used a second track, which can be labeled the "unilateral" track. Under this approach, the United States threatens retaliation, usually in the form of restricting trade partners' access to the vast U.S. market, in order to get the partner to open its markets to U.S. exports or to cease other offensive commercial practices and policies. The United States has employed this approach primarily against foreign practices not covered by GATT/WTO rules or because the multilateral dispute settlement process proved too slow and ineffective to meet U.S. needs. For several decades, especially in the 1970s and 1980s, the United States conducted its trade policy with Japan "unilaterally" to get Japan to amend domestic laws, regulations, and practices that prevented U.S. exporters from securing what they considered to be a fair share of the Japanese market. More and more, however, U.S. trade policy is becoming dominated by a third track--bilateral and regional negotiations to establish FTAs. The United States completed its first FTA with Israel in 1985 under President Reagan. It completed its second with Canada in 1989 under President Bush, whose Administration was involved in the process of expanding it to Mexico, a process that was completed by the Clinton Administration in 1993. However, even after the completion of NAFTA, it was still unclear whether bilateral and regional FTAs had become a fixture in U.S. foreign trade policymaking or anomalies to cement already strong economic relationships. By 1994 it seemed apparent that FTAs were indeed becoming a fixture when the United States, under the Clinton Administration, led a group of trade ministers from 33 other Western Hemispheric countries in agreeing to work toward establishing a Free Trade Area of the Americas (FTAA) by 2005. In the same year, political leaders from the United States and other member-countries of the Asian-Pacific Economic Cooperation (APEC) forum signed a declaration in Bogor, Indonesia, to work toward free trade and investment in the region by 2010 for developed countries and by 2020 for all member-countries. Both of those efforts have flagged. The pursuit of FTAs continued when, on June 6, 2000, President Clinton and Jordanian King Abdullah announced that their two countries would begin negotiations on establishing a free trade area. An agreement was quickly reached and was signed on October 24, 2001. Similarly, President Clinton and Singapore Prime Minister Goh Chok Tong announced, somewhat unexpectedly, on November 16, 2000, that their two nations would launch negotiations to complete a free trade agreement. And on December 6, 2000, the United States and Chile started negotiations to establish an FTA. Chile had long been mentioned as a potential addition to NAFTA or as a partner in a stand-alone FTA. In the meantime, many countries, including the other major trading powers, were actively negotiating free trade agreements. The WTO has reported that more than 200 FTAs are in force. For example, Canada formed an FTA with Chile, as did Mexico. The EU has formed FTAs with a number of countries. Japan, which had shunned the use of FTAs, formed an FTA with Singapore and is exploring the possibility of forming an FTA with Korea, although those negotiations have been suspended. The Bush Administration had affirmed the strategy of pursuing U.S. trade policy goals through the multilateral trade system but gave strong emphasis to building bilateral and regional trade ties through free trade agreements through a policy called a competition in liberalization. The Bush Administration continued negotiations that the Clinton Administration initiated. At the end of 2002, the Bush Administration completed FTA negotiations with Chile and Singapore first begun by the Clinton Administration in 2000. The FTAs with Chile and Singapore entered into force on January 1, 2004. Perhaps encouraged by the passage and enactment of legislation granting the President trade promotion authority (TPA), as contained in the Trade Act of 2002 ( P.L. 107-210 --signed into law on August 6, 2002), the Bush Administration moved ahead with a trade agenda that contained an unprecedented number of FTAs. In 2004, agreements with Australia and Morocco were signed, approved by Congress. The agreement with Australia entered into force on January 1, 2005, and the one with Morocco on January 1, 2006. An agreement with Central American countries and one with the Dominican Republic were also signed and combined into one agreement, the DR-CAFTA. The President sent Congress draft implementing legislation on June 23, 2005. The House and Senate passed the legislation ( H.R. 3045 ) on July 27 and 28, 2005, respectively, and President Bush signed it into law on August 2, 2005 ( P.L. 109-53 ). The agreement with El Salvador entered into force on March 1, 2006, with Honduras and Nicaragua on April 1, 2006, with Guatemala on July 1, 2006, with the Dominican Republic on March 1, 2007, and with Costa Rica on January 1, 2009. An agreement with Bahrain was signed on September 14, 2004, for which Congress passed and the President signed implementing legislation ( H.R. 4340 / P.L. 109-169 , January 11, 2006). The agreement entered into force on August 1, 2006. Congress passed and the President signed implementing legislation ( P.L. 109-283 ) for an FTA with Oman, which entered into force on January 1, 2009. Under the Bush Administration, the United States signed FTAs with Colombia, Peru, Panama, and South Korea (see Table 1 ). The House passed (285-132) on November 8, 2007, and the Senate passed on December 4, 2007, implementing legislation ( H.R. 3688 ) for the U.S.-Peru FTA. The President signed the bill into law ( P.L. 110-138 ) on December 14, 2007. The FTA entered into force on February 1, 2009. After several months of negotiations, on May 10, 2007, congressional leaders and the Bush Administration reached an agreement on new policy priorities that are to be included in pending FTAs. These priorities included the enforcement of five core labor standards that are part of the International Labor Organization's Declaration on Fundamental Principles and Rights of Work; commitment to enforce seven multilateral environmental agreements to which FTA partners are parties; the availability of affordable generic pharmaceuticals; port security; and foreign investor rights in investor-state disputes. President Obama and his Administration had expressed support for three pending FTAs from the Bush Administration--with Colombia, Panama, and South Korea--but with the understanding that some outstanding issues needed to be addressed. Specifically, regarding Colombia, critics, particularly labor unions, remain concerned about the treatment of union leaders and other labor activists. While supporters cited data showing that violence against union leaders had decreased, critics charged that the violence was still unacceptably high. Regarding Panama, the primary concerns raised pertained to Panamanian tax policy, which, critics charged, allowed Panama to be a haven for companies and individuals to avoid taxes. The South Korean agreement was the most challenging case. Some Detroit-based car manufacturers, especially Ford and Chrysler, had opposed the agreement because, they asserted, the agreement did not adequately address South Korean barriers to auto imports. (GM had taken a neutral position on the KORUS FTA.) However, as a result of the modifications agreed to in December 2010, most of which pertain to autos, both Ford and Chrysler support approval of the KORUS FTA, as does the United Auto Workers (UAW) union. U.S.-based steel manufacturers have also opposed the agreement because, they argued, it would weaken U.S. trade remedy (antidumping, countervailing duty) laws. Other major labor unions, including the AFL-CIO, oppose the agreement. On April 6, 2011, the Obama Administration announced that Colombia had agreed to an "Action Plan Related to Labor Rights" laying out steps it was prepared to take to resolve the labor rights issues. Panama and the United States came to a resolution on the tax transparency issue by agreeing to a Tax Information and Exchange Agreement (TIEA), which Panama ratified on April 13, 2011. The TIEA permits either country to request information on most types of federal (U.S.) or national (Panama) taxes. To address the tax haven issue, Article 7 specifically allows for tax information exchange "under the existing Treaty on Mutual Legal Assistance in Criminal Matters," which covers money laundering among other illicit financial activities. Eventually, President Obama submitted draft implementing legislation to Congress on October 3, 2011, for each of the FTAs. The 112 th Congress approved each of the bills in successive votes on October 12, along with legislation to renew an aspect of the Trade Adjustment Assistance (TAA) program, and the President signed them into law on October 21, 2012. The U.S.-South Korean agreement entered into force on March 15, 2012, the U.S.-Colombia FTA entered into force on May 15, 2012, and the U.S.- Panama FTA entered into force on October 31, 2012. In the meantime, on November 14, 2009, President Obama committed to work with the current and prospective members of the Trans-Pacific Strategic Economic Partnership Agreement (TPP). The TPP is a free trade agreement that includes nations on both sides of the Pacific. Negotiations on the TPP, which grew out of an FTA among four countries--Brunei, Chile, New Zealand, and Singapore--now include, besides the United States, Australia, Japan, Malaysia, Mexico, Peru, and Vietnam. Furthermore, the United States and the European Union have expressed their intention to negotiate an FTA--the Transatlantic Trade and Investment Partnership (TTIP). The surge in U.S. interest in FTAs and in the formation of FTAs worldwide raises the question of their impact on the countries included in an FTA and on the rest of the world. It is an issue that economists have long studied and debated. Interest in the issue has peaked at various times in the post-World War II period. The first time was the formation of the European Common Market. Interest has peaked again with the current trends in FTAs. The debate has relied largely on theory since empirical data are scarce save for the experience of the European Union. The debate has also divided economists between those who strongly oppose FTAs as an economically inefficient mechanism and those who support them as a means to build freer trade. Economists usually base their analysis of the impact of FTAs on the concepts of trade creation and trade diversion . These concepts were first developed by economist Jacob Viner in 1950. Viner focused his work on the economic effects of customs unions, but his conclusions have been largely applied to FTAs and other preferential trade arrangements. His analysis was also confined to static (one-time) effects of these arrangements. Trade creation occurs when a member of an FTA replaces domestic production of a good with imports of the good from another member of the FTA, because the formation of the FTA has made it cheaper to import rather than produce domestically. The creation of the trade is said to improve economic welfare within the group because resources are being shifted to more efficient uses. Trade diversion occurs when a member of an FTA switches its import of a good from an efficient nonmember to a less efficient member because the removal of tariffs within the group and the continuation of tariffs on imports from nonmembers make it cheaper to do so. Trade diversion is said to reduce economic welfare because resources are being diverted from an efficient producer to a less efficient producer. In most cases, it appears that FTAs lead to both trade diversion and trade creation with the net effects determined by the structure of the FTA. Therefore, even if two or more countries are moving toward freer trade among themselves in an FTA, the FTA could make those countries and the world as a whole worse off if the FTA diverts more trade than it creates, according to economic theory. (See box below for illustrative examples of trade diversion and trade creation.) Trade policy makers encounter circumstances much more complicated than those depicted in economic theory. Many functioning and proposed FTAs encompass more than two countries and involve a range of products, both goods and services, making it much more challenging to evaluate their economic impact. To provide an analytical framework, some economists have developed sets of conditions under which, they have concluded, an FTA would create more trade than it diverts. They state that trade creation is likely to exceed trade diversion-- the larger the tariffs or other trade barriers among members before the FTA is formed; the lower the tariffs and other barriers in trade with nonmembers; the greater the number of countries included in the FTA; the more competitive or the less complementary the economies joining the FTA; and the closer the economic relationship among the members before the FTA was formed. Economists also have determined that, along with the immediate, static effects of trade diversion and creation, FTAs generate long-term dynamic effects that might include the following: increased efficiency of production as producers face increased competition with the removal of trade barriers; economies of scale, that is, decreased unit costs of production as producers can have larger production runs since the markets for their goods have been enlarged; and increased foreign investment from outside the FTA as firms seek to locate operations within the borders of the FTA to take advantage of the preferential trade arrangements. Until recently not many FTAs were in operation; therefore, available data on their impact have been limited to the experience of the formation of the European Common Market and subsequently the European Union. Most studies have concluded that the European Community has resulted in more trade creation than trade diversion. However, in some sectors, such as agriculture, the net effect has been trade diversion because the EU's Common Agricultural Policy raised barriers to agricultural trade outside the EU. A basic principle of the General Agreement on Tariffs and Trade (GATT) that is administered by the WTO is the most-favored nation (MFN) principle. Article I of GATT requires that "any advantage, favor, privilege, or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties." FTAs, by definition, violate the MFN principle, since products of FTA member countries are given preferential treatment over nonmember products. However, the original GATT signatories recognized that FTAs and customs unions, while violating the MFN principle, improve economic welfare of all members, if certain conditions are met to minimize trade diversion. Article XXIV of the GATT requires that FTA members shall not erect higher or more restrictive tariff or nontariff barriers on trade with nonmembers than existed prior to the formation of the FTA. Furthermore, Article XXIV requires the elimination of tariffs and other trade restrictions be applied to "substantially all the trade between the constituent territories in products originating in such territories." In addition, Article XXIV stipulates that the elimination of duties and other trade restrictions on trade within the FTA be accomplished "within a reasonable length of time," meaning a period of no longer than 10 years, according to the "Understanding of the Interpretation of Article XXIV of the General Agreement on Tariffs and Trade" reached during the Uruguay Round. Member countries are required to report to the WTO their intention to form FTAs. In addition to Article XXIV, the "Enabling Clause," agreed to by GATT signatories in 1979, allows developing countries to form preferential trading arrangements without the conditions under Article XXIV. Article V of the General Agreement on Trade in Services (GATS), the agreement that governs trade in services under the WTO, provides for the preferential treatment of trade in services within FTAs or similar regional trading arrangements. Article V lays out requirements of substantial coverage of the elimination of trade restrictions and the prohibition on the ex post facto imposition of higher restrictions on services trade with nonmember countries. The WTO formed the Committee on Regional Trade Agreements (CRTA) in 1996 to review pending and operating FTAs and customs unions to determine whether they conform to WTO rules under the GATT and the GATS. However, the rules are sufficiently ambiguous as to be subject to continuing debate within the CRTA. For example, the members have been unable to agree on what constitutes "substantially all trade" under Article XXIV (GATT) or "substantially all sectors" under Article V (GATS). The number of FTAs and customs unions worldwide has increased at a rapid rate. As of July 2010, 474 FTAs and customs unions had been notified to the GATT/WTO. Some 283 FTAs and customs unions are in force. The remaining FTAs and customs unions were largely superseded by other agreements involving the same participants. Yet, none of the reports of notifications has been completed because CRTA members have not been able to reach a consensus on any of them. Nevertheless, the vast majority of the FTAs have gone into operation. For example, the CRTA has not completed its report on NAFTA, which went into effect in January 1994. The proliferation of FTAs and disagreements on rules have crippled the WTO review process and led WTO members to place review of the rules on regional agreements on the agenda of the Doha Development Agenda round. The Doha Ministerial Declaration, which established the agenda for the new round, states that the negotiations will strive at "clarifying and improving disciplines and procedures under the existing WTO provisions applying to regional trade agreements." The surge in the number of FTAs worldwide has been driving a spirited debate among experts, policy makers, and other observers over whether they promote or damage U.S. economic interests and the economic interests of the world at large. The differing views can be categorized into three main groups. One group consists of those who oppose FTAs because, they assert, FTAs undermine the development of the multilateral trading system and act as a "stumbling block" to global trade liberalization. A second group supports FTAs because, they believe, FTAs act as a "building block" to multilateral trade liberalization. The third category are those individuals and groups that are opposed to trade liberalization in general because they believe its impact on workers in import-sensitive sectors or on the environment is unacceptable, or because, they assert, it undermines U.S. sovereignty. Among representatives of the first group of experts are international economists Jagdish Bhagwati and Anne O. Krueger, who have strongly advocated that the United States and other national governments should not pursue FTAs at the expense of multilateral negotiations in the WTO. Bhagwati has concluded that FTAs are by definition discriminatory and therefore trade diverting. He argues that tariffs remain high on many goods imported into developing countries and even on some labor-intensive goods (such as wearing apparel and agricultural products) imported into developed countries. Consequently, he asserts, trade diversion will likely result when an FTA is formed. Both Bhagwati and Krueger cite the "rules of origin" and other conditions of an FTA's establishment for strong criticism. Bhagwati claims, for example, that the rules of origin in one FTA more than likely do not coincide with the rules of origin in many of the other FTAs. Furthermore, he argues, the schedule of implementation of the tariff reductions and other conditions for one FTA will not match the schedule of other FTAs. The incongruity of these regulations across FTAs has created what Bhagwati sees as a customs administration nightmare and calls the "spaghetti-bowl" phenomenon. In her criticism, Krueger claims that in order to meet the input thresholds of rules of origin requirements, producers in one FTA partner will be encouraged to purchase as many inputs as possible from other partner countries, even if a non-FTA member can produce and sell the inputs more cheaply and even if the tariff rate on inputs from non-FTA producers is zero. Importing inputs from within the FTA to meet the rules of origin threshold allows the producer to sell the final product within the FTA duty free. Under such circumstances imports of inputs are diverted from efficient producers outside the FTA to less efficient producers inside the FTA. A corollary to Krueger's conclusion is that the higher the threshold established in the rules of origin, the greater the chance that trade diversion will take place. A range of economists, policy makers, and other experts embrace a second view that FTAs can enhance trade and should be pursued. Economist Robert Z. Lawrence argues, for example, that recent FTAs involve much more economic integration than the elimination of tariffs. NAFTA, he points out, has led to the reduction in barriers on services trade, foreign investment, and other economic activities not covered by the GATT/WTO. In addition, under NAFTA, Mexico has affirmed its commitment to economic reform, making its economy more efficient. Lawrence asserts that the theory traditionally applied to FTAs (by Bhagwati, Krueger, and others) does not take into account these dynamic welfare enhancing characteristics of FTAs, which he believes are likely to outweigh any trade diversion that results from the elimination of tariffs. A CATO Institute study by economist Edward L. Hudgins argues that while it may be preferable to liberalize trade multilaterally, countries should take any available avenue, including bilateral or regional FTAs, even if they lead to some trade diversion. Furthermore, Hudgins asserts that FTAs can be more efficient vehicles for addressing difficult trade barriers than the WTO, where the large membership requires compromise to the least common denominator to achieve consensus. FTAs have also have provided momentum for GATT/WTO members to move ahead with new trade rounds, he claims. Economist C. Fred Bergsten holds a position similar to the one expressed in the CATO study, that in lieu of multilateral trade negotiations, FTAs are the next best thing and promote global trade liberalization. Bergsten has advocated establishing U.S. FTAs with New Zealand and with South Korea. Economist Jeffrey Schott argues that some U.S. firms are being discriminated against because FTAs are rapidly forming in which the United States is not a participant; therefore, in his review, the United States must negotiate FTAs. Bergsten and others have also advocated structuring FTAs in a manner that could serve as building blocks of a global free trade system. Using the APEC plan as a model, Bergsten argues for an FTA based on "open regionalism," that is, establishing the road map for free trade and investment in the Asian-Pacific region for 2010/2020 among the members but allowing other countries to join if they agree to accede to the conditions. In order to minimize trade diversion, he suggests that trade and investment could be implemented on an MFN principle, perhaps conditional MFN in order to limit the "free rider" effects. Other countries, and other regional groupings, Bergsten presumes, would be willing to accept the conditions having been enticed by the trade and investment opportunities until most of the membership of the WTO would be engaged in forming a free trade area. A Heritage Foundation report draws up a similar proposal for a "Global Free Trade Association." A third group opposes FTAs but also trade liberalization or "globalization" in general. Included in this group are representatives of import-sensitive industries, for example labor unions, and representatives of social action groups such as some environmentalists, who question the wisdom of trade liberalization whether done through multilateral negotiations or through bilateral and regional trading arrangements. They assert that trade liberalization unfairly affects workers by exporting jobs to countries with lower wages and undermines the nation's ability to protect the environment by allowing companies to relocate to countries with less stringent environmental regulations. For example, the United Auto Workers (UAW) union has stated the following position regarding the Free Trade Area of the Americas (FTAA): Such an agreement would provide broader protections for the rights of corporations, further undermine the ability of governments in the region to regulate their economies in the interests of their citizens and intensify the downward pressure on workers' incomes through competition for jobs and investments. All of this would take place in the absence of any counter-balancing protections for workers, consumers or the environment. This is why the UAW has consistently opposed the direction of these negotiations, the positions taken by the U.S. government, and worked closely with other organizations in the region to oppose the creation of an FTAA. Free trade agreements are viewed by many as a significant trade policy vehicle for the United States and for other major trading nations. Over the last 10-15 years, the debate in U.S. trade policy has shifted from, "Should the United States form FTAs?" to "Should the United States form any more FTAs and, if so, with whom, when, and under what conditions?" Congress has a direct role in addressing those questions. Before any FTA can go into effect, Congress must review it as part of implementing legislation. A number of questions regarding FTAs could arise as the Obama Administration pursues the TPP, and Congress oversees and evaluates overall U.S. trade policy strategy. One question pertains to the economic impact of an FTA. As with any trade liberalizing measure, an FTA can have positive effects on some sectors and adverse effects on others. An FTA may create trade for one sector of the U.S. economy but divert trade away from others. A Member of Congress is placed in the position of weighing the effects on his/her constituency versus the overall impact on the United States and other trading partners. Because conditions can differ radically from one FTA to another, the evaluation will likely differ in each case. Furthermore, Members might take into account not only the immediate static effects of FTAs but also the long-term, dynamic effects, which could play an important role in evaluating their contribution to U.S. economy. A second, broader question is whether bilateral and regional FTAs are the appropriate trade policy strategy to promote U.S. national interests. Economic specialists differ sharply on this question, with some viewing the proliferation of FTAs as leading to confusion and serving as stumbling blocks to the development of a rules-based multilateral trading system. Other specialists consider FTAs as appropriate trade policy vehicles for promoting freer trade, as building blocks to a multilateral system, and as necessary to protect U.S. interests against the FTAs that other countries are forming without the United States. Still others oppose trade liberalization in any form as counter to U.S. interests. A third question is whether the Office of the United States Trade Representative and other trade policy agencies have sufficient time and human resources to negotiate a number of FTAs simultaneously while managing trade policy in the WTO and other fora. Others might find some U.S. interests being short-changed. A fourth question is to what degree, if any, should non-trade concerns be included in FTAs? This issue has emerged in a number of completed and ongoing FTA negotiations. A fifth overarching question is what criteria should the United States employ in determining which countries would make appropriate FTA partners. For example, to what degree should political factors be given weight over economic factors?

Free trade areas (FTAs) are arrangements among two or more countries under which they agree to eliminate tariffs and nontariff barriers on trade in goods among themselves. However, each country maintains its own policies, including tariffs, on trade outside the region. In the last few years, the United States has engaged or has proposed to engage in negotiations to establish bilateral and regional free trade arrangements with a number of trading partners. Such arrangements are not new in U.S. trade policy. The United States has had a free trade arrangement with Israel since 1985 and with Canada since 1989, which was expanded to include Mexico and became the North American Free Trade Agreement (NAFTA) effective in January 1994. U.S. interest in bilateral and regional free trade arrangements surged, and the Bush Administration accelerated the pace of negotiations after the enactment of the Trade Promotion Authority in August 2002. U.S. participation in free trade agreements can occur only with the concurrence of Congress. In addition, FTAs affect the U.S. economy, with the impact varying across sectors. The 112th Congress and the Obama Administration faced the question of whether and when to act on three FTAs pending from the Bush Administration--with Colombia, Panama, and South Korea. Although the Bush Administration signed these agreements, it and the leaders of the 110th Congress could not reach agreement on proceeding to enact them. No action was taken during the 111th Congress either. After discussion with congressional leaders and negotiations with the governments of Colombia, Panama, and South Korea to assuage congressional concerns regarding treatment of union officials (Colombia), taxation regimes (Panama), and trade in autos (South Korea), President Obama submitted draft implementing legislation to Congress on October 3, 2011. The 112th Congress approved each of the bills in successive votes on October 12, along with legislation to renew an aspect of the Trade Adjustment Assistance (TAA) program. President Obama signed the bills into law on October 21, 2011. In the meantime, on November 14, 2009, President Obama committed to work with the current and prospective partners in the negotiations to form a Trans-Pacific Partnership (TPP) Agreement. The TPP is a free trade agreement that includes nations on both sides of the Pacific. The TPP negotiations emerged from an FTA that included Brunei, Chile, New Zealand, and Singapore and that entered into force in 2006. Besides the United States, Australia, Canada, Japan, Malaysia, Mexico, Peru, and Vietnam have joined the negotiations. Furthermore, the United States has been negotiating with the 28-member European Union to form the Transatlantic Trade and Investment Partnership (TTIP). FTAs raise some important policy issues: Do FTAs serve or impede U.S. long-term national interests and trade policy objectives? Which type of an FTA arrangement meets U.S. national interests? What should U.S. criteria be in choosing FTA partners? Are FTAs a substitute for or a complement to U.S. commitments and interests in promoting a multilateral trading system via the World Trade Organization (WTO)? What effect will the expiration of TPA have on the future of FTAs as a trade policy strategy?

Numerous federal, state, and local agencies share responsibilities for regulating the safety of the U.S. food supply. Federal responsibility for food safety rests primarily with the Food and Drug Administration (FDA) and the Food Safety and Inspection Service (FSIS). FDA, an agency of the Department of Health and Human Services, is responsible for ensuring the safety of the majority of all domestic and imported food products (except for meat and poultry products). FSIS, an agency at the U.S. Department of Agriculture, regulates most meat, poultry, and processed egg products. The Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies of the House and Senate Appropriations Committees appropriate funds for all of FDA and FSIS. The FY2016 Agriculture appropriation was enacted in December 2015, as part of an omnibus appropriation ( P.L. 114-113 ). Including enacted funding provided in the FY2016 Agriculture appropriation, combined appropriations and fees collected to cover food safety activities at FDA and USDA will total an estimated $2.5 billion in FY2016, more or less split between the two agencies ( Table 1 ). As such, funding (and staffing levels) between FDA and FSIS is disproportionate to the volume of the food supply that each agency regulates for safety. FSIS is responsible for roughly 10%-20% of the U.S. food supply, while FDA is responsible for the remaining 80%-90%. In recent years, congressional appropriators have increased funding for FDA food programs, more than doubling funding over the past decade. Largely, that has been in response to comprehensive food safety legislation enacted in the 111 th Congress, as part of the FDA Food Safety Modernization Act (FSMA, P.L. 111-353 ). FSMA was the largest expansion of FDA's food safety authorities since the 1930s. Among its many provisions, FSMA authorized increased frequency of inspections at food facilities, tightened record-keeping requirements, extended oversight to certain farms, and also mandated product recalls. It requires food processing, manufacturing, shipping, and other facilities to conduct a food safety plan of the most likely safety hazards, and to design and implement risk-based controls. It also mandates improvements to foodborne illness surveillance systems and increased scrutiny of food imports. FSMA did not directly address meat and poultry products under USDA's jurisdiction. FSMA also authorized additional appropriations and staff for FDA's food safety activities. It provided limited additional funding through industry-paid user fees. Funding for FSIS has remained mostly unchanged in recent years. Staffing levels differ substantially between the two agencies: FSIS staff number around 9,000 full-time equivalents (FTEs), while FDA's food-related staff, who cover more than food safety, number about 3,700 FTEs. Although Congress authorized funds to be appropriated in FSMA, it did not provide the full funding needed for FDA to perform these expanded activities under the law. After FSMA was signed into law in January 2011, concerns were voiced about whether there would be enough money to overhaul the U.S. food safety system and also whether expanded investment in this area was appropriate in the budgetary climate that has since prevailed. Prior to enactment, the Congressional Budget Office (CBO) estimated that fully implementing FSMA could increase net federal spending subject to appropriation by about $1.4 billion over a five-year period (FY2011-FY2015). This cost estimate covered activities at FDA and other federal agencies and did not include offsetting revenue from the collection of new user fees authorized under FSMA. During the debate leading up to FSMA, Congress considered imposing a new facility registration fee that might have offset some of the costs of fully implementing the requirements under the new law but ultimately such fees were not enacted. Prior to enactment, CBO estimated that about $240 million in new fees would be collected from FY2011-FY2015. Taking into account these new fees, CBO estimated that covering the five-year cost of new requirements within FDA, including more frequent inspections, would require additional outlays of $1.1 billion. FDA continues to implement regulations under FSMA. According to FDA, during the past five years (FY2011-FY2015), the agency has received increases to its funding base totaling $162 million for enacted changes to its food safety programs, after accounting for permanent base reductions due to sequestration and other differences from enacted amounts as reported by FDA. Including enacted increases for other food safety activities, FDA's budget authority for food safety and FSMA implementation has totaled $168.4 million ( Table 2 ). Previously, FDA reported that an additional $400 million to $450 million per year above the FY2012 base is needed to fully implement FSMA. Available FDA funding for FSMA implementation and other food safety activities has been lower than what FDA has said it needs to fully implement the law. FSMA also authorized an increase in FDA staff, which was expected to reach 5,000 by FY2014. FDA reports actual staffing levels at 3,700 FTEs in FY2015 ( Table 1 ). FDA officials have continued to claim that without additional funding, as requested by the Administration, there will be a significant funding gap for FSMA implementation. State agriculture officials and representatives of the National Association of State Departments of Agriculture (NASDA) have continued to push for full FSMA funding so that front-line state officials can prepare for implementation. Food industry groups have asked congressional appropriators for increased budget authority for FDA to fully implement FSMA, at levels requested by the Administration, in order to maintain consumer confidence. Public health and consumer safety groups, as well as victims of food-borne illness, have also continued to call for additional food safety funding. For FDA's food safety activities, including FSMA implementation, the enacted FY2016 Agriculture appropriation provides for a $104.5 million increase in budget authority, nearly that requested in the Administration's budget ($109.5 million). This increase in budget authority is more than double what the House and Senate FY2016 committee bills had previously proposed: The House committee bill ( H.R. 3049 ) would have increased funding for FSMA by $41.5 million, whereas the Senate ( S. 1800 ) would have increased funding by $45.0 million bill. Both the House and Senate committees had noted that these increases and previous increases provided since FY2011 "should assist the FDA in preparation for the implementation of FSMA prior to the effective dates of the seven foundational proposed rules." Both committee reports specify budgeted amounts for the following program areas: Inspection Modernization and Training; the National Integrated Food Safety System; Education and Technical Assistance for Industry; Technical Staffing and Guidance Development; Import Safety; and Risk Analytics and Evaluation. The enacted FY2016 appropriations provide $987.3 million for FDA's Foods program--one of the agency's primary program areas focused on food safety activities. This amount is identical to that requested by the Administration ( Table 1 ). FDA's Foods program covers the agency's food safety activities, as well as certain other food-related programs. Its budget in FY2015 accounted for about one-third of the agency's total appropriation. FDA's Foods program plays a major food safety role. The program has the primary responsibility for assuring that the nation's food supply, quality of foods, food ingredients, and dietary supplements (and also cosmetic products) are safe, sanitary, nutritious, wholesome, and properly labeled. In recent decades FDA's Foods program has had to adapt to the increasing variety and complexity of the U.S. food supply, including rising import demand for products produced outside the United States, as well as other market factors including emerging microbial pathogens, natural toxins, and technological innovations in production and processing. However, FDA's total budget for food safety programs and activities extends beyond the agency's Foods program, encompassing other food and veterinary medicine programs at FDA. As reported by FDA, the agency's budget for food safety activities totaled $1.2 billion in FY2015. This amount includes most of FDA's Food program funding, along with aspects of other FDA program areas covering food additives, antimicrobial resistance, nutrition labeling and dietary supplements, cosmetics, and all related user fees, as well as administrative expenses associated with FDA headquarters and rent-related expenses. Including the enacted FY2016 appropriation that provides for a $104.5 million increase in budget authority, this could raise the budget authority for FDA's food safety activities to more than $1.3 billion annually. These congressional appropriations would be augmented by existing (currently authorized) user fees. These fees, as authorized under FSMA, include food and feed recall fees, food reinspection fees, and voluntary qualified importer program fees. In recent years these fees have generated less than $18 million per year. In addition to FSMA-authorized user fees, the Administration had reproposed a series of new user fees totaling $167.7 million to cover the cost associated with food facility registration and inspection, food imports, international couriers, and food contact notifications. From FY2012 through FY2015, the enacted appropriations have not included these proposed user fees. Both the House and Senate reported bills explicitly did not include the Administration's proposed new fees. In addition, two members of the House Appropriations Committee, Representatives Rosa DeLauro and Sam Farr, have repeatedly called on the Administration to stop requesting additional user fees but rather to "request the resources [FDA] needs to fully implement [FSMA]." Industry representatives also continue to actively oppose such fees. User fees are generally established in law by the authorizing committees and not by appropriators. The enacted FY2016 Agriculture appropriation specifies that "none of the funds" made available be used to implement or enforce any FSMA requirements with respect to "the regulation of the distribution, sale, or receipt of dried spent grain byproducts of the alcoholic beverage production process, irrespective of whether such byproducts are solely intended for use as animal feed." This reflects language in the House committee report that ensures dry and wet spent grains used for animal food are regulated equally under FSMA. The enacted FY2016 appropriation also provides $5 million for competitive grants to state agencies for local educational agencies and schools to purchase equipment to serve healthier meals and improve food safety, among other goals. In addition, both the House and Senate committee reports include a number of provisions requiring FDA to take certain additional food safety actions and other related activities. For example, both House and Senate appropriators make a number of recommendations regarding FSMA and FDA's ongoing efforts to develop regulations and guidance pertaining to the various provisions of the law. Both committee reports include language regarding FDA's Food Safety Centers of Excellence in supporting FSMA implementation, and also broadly encourage FDA to form partnerships under FSMA. The House committee reports would provide $2.5 million for FSMA implementation and interagency coordination between FDA and USDA's National Institute for Food and Agriculture (NIFA). Both committees also express concerns about the FSMA rulemaking process and potential economic impacts. For example, the Senate committee report expresses concerns about how FDA will determine whether and to what degree a farm or food business is subject to FSMA regulation. Both committees include language regarding the FDA's scientific integrity policy and scientific study data. The House committee report reminds FDA to submit required reports on schedule and to submit overdue scheduled reports. The inclusion of these provisions reflect a range of concerns that have been expressed by Members of Congress as FDA has developed regulations under FSMA, as well as concerns about extensive delays in FDA's rulemaking and implementation of FSMA. The enacted FY2016 appropriation contains a number of provisions related to fish and seafood labeling and safety. It clarifies that the term "Alaskan pollock" or "Alaska pollock" refer solely to fish harvested in the state waters or Alaska or in adjacent areas as defined in law. Both the House and Senate reports had directed FDA to expedite consideration of whether it is appropriate to change the nomenclature on the Seafood List from "Alaska pollock" to "pollock," given ongoing concerns about misleading FDA labeling that allows pollock sourced from Russia or Korea to be sold as Alaskan pollock. Separately, the enacted law directs FDA to "not allow the introduction or delivery for introduction into interstate commerce of any food that contains genetically engineered salmon until FDA publishes final labeling guidelines for informing consumers of such content." It directs FDA to spend "not less than $150,000" to "develop labeling guidelines" and "implement a program" to inform consumers whether salmon for sale is genetically engineered. This provision pertains to actions recently taken by FDA, approving a new animal drug application concerning a genetically engineered Atlantic salmon (AquAdvantage salmon). The Senate report contains a series of provisions related to seafood safety and directs FDA to publish updated advice to pregnant women on seafood consumption. The Senate report further encourages FDA to address seafood economic integrity issues, particularly with respect to mislabeling of species, weights, and treatment. The enacted appropriation did not include a policy rider seeking to preempt or delay state laws that require mandatory on-package labeling of foods containing genetically engineered ingredients. The possible inclusion of such a provision in the omnibus was widely circulated in a series of press reports. The Coalition for Safe Affordable Food, an industry coalition led by the Grocery Manufacturers Association (GMA), had supported the inclusion of language in the omnibus that would address state laws regarding such labeling, consistent with provisions contained in a voluntary labeling bill, H.R. 1599 , that would preempt current and future state laws from requiring mandatory labeling of genetically engineered foods. H.R. 1599 passed the U.S. House of Representatives in July 2015. To date, a reported 30 states have introduced bills to label genetically engineered foods, including Maine, Vermont, and Connecticut. Some groups, such as the Center for Food Safety, have opposed legislative efforts to block states from implementing food labeling laws regarding genetically engineered ingredients. The Senate committee report also encourages FDA to resolve a dispute between the United States and the European Union over sanitation protocols on U.S. molluscan shellfish to expedite its audit of growing areas in Europe and to seek equivalency in sanitary standards to address ongoing trade concerns. The House committee further addresses illnesses associated with imported pet food, given FDA's estimate of approximately 5,000 reports (dating back to 2007) of pet illnesses, including pet deaths, which may be related to consumption of jerky treats. Many attribute these concerns to jerky pet treats imported from China. House appropriators are asking FDA to provide a summary of all activities associated with the agency's ongoing investigation and requesting semi-annual reports on the status of its investigation. House appropriators further direct FDA to work with local governments at high-volume ports of entry to develop processes to reduce the risk of foodborne illnesses and support the capacity of local officials in dealing with foodborne threats. The enacted FY2016 Agriculture appropriation contains a number of other policy riders for a range of programs related to FDA's Foods program. Not all of these provisions are directly related to FDA's food safety activities; some involve other FDA food programs. For example, the enacted law prevents the use of any funds to implement the 2015 "Dietary Guidelines for Americans" unless USDA and the Department of Health and Human Services (HHS) comply with specified requirements. Also, USDA is directed to engage the National Academy of Medicine to conduct a comprehensive study and to establish an advisory committee to further examine the issue. In addition, the enacted FY2016 appropriation prevents any funds from being used to implement policies "that would require a reduction in the quantity of sodium contained in federally reimbursed meals, foods, and snacks sold in schools" below a certain level set in regulation. Both committee bills expressed concerns about FDA's "continued focus on voluntary sodium reductions and recommendations to remove the Generally Recognized as Safe (GRAS) status of sodium." The appropriation also allows states to grant exemption to schools from certain whole grain requirements that took effect in July 2014. The enacted law also prevents any funds from being used to enforce FDA's final regulations regarding restaurant menu labeling until a later specified date. The enacted law further states that no partially hydrogenated oils (PHOs) shall be deemed unsafe or adulterated until FDA's formal phase-out starting in June 2018. This provision reflects concerns expressed by the House committee about FDA's recent determination that PHOs are no longer considered GRAS. The Senate committee report further expresses concern that FDA has not published the results of its study of consumer responses to nutrition labeling regarding added sugars. The enacted FY2016 Agriculture appropriation provides $1.015 billion to FSIS for FY2016, slightly more than the Administration's request of $1.012 billion but less than that enacted for FY2015 ( Table 1 ). Appropriations would be augmented by existing (currently authorized) user fees that FSIS estimates to be nearly $180 million per year. FSIS appropriations are divided into various subaccounts, and the enacted FY2016 appropriation provides for the following amounts: Federal ($898.8 million); State ($61.0 million); International Inspection ($16.7 million); Codex Alimentarius ($3.8 million); and the Public Health Data Communications Infrastructure System ($34.6 million). The enacted law does not include the Administration's reproposed user fee of $4 million to cover additional inspection costs associated with performance issues at inspected facilities. The enacted FY2016 Agriculture appropriation directs FSIS to continue to implement the catfish inspection program, as required under the 2014 farm bill ( P.L. 113-79 , SS12106). The agency promulgated final regulations in December 2015 and is expected to begin to implement the new rule starting in March 2016. The explanatory text of the omnibus provides $2.5 million for FSIS to implement the program, as proposed in the Administration's budget. In addition, both House and Senate committee reports include a number of provisions requiring FSIS to take certain additional food safety actions and other related activities. The House report expresses concern about countering economic fraud and improving the safety of the U.S. seafood supply. Both committees encourage FSIS and USDA research agencies to support developing technologies that will provide rapid, portable, and easy-to-use screening of seafood at ports and at wholesale and retail locations. The House committee report further encourages innovation and modernization at slaughter and processing establishments regarding water-conserving technologies for hand-washing facilities. The Senate committee report directs FSIS to submit a report on its recruitment of inspection program personnel. Consistent with provisions contained in previous appropriation bills, the enacted law requires that FSIS have no fewer than 148 FTEs dedicated to the inspection and enforcement of the Humane Methods of Slaughter Act (HMSA). The Senate committee report further directs FSIS to ensure compliance with humane handling rules for live animals and to continue to provide certain annual reports to Congress. The enacted FY2016 Agriculture appropriation contains a number of policy riders regarding related USDA programs. It repeals mandatory country-of-origin-labeling (COOL) requirements for certain beef and pork products, following a recent World Trade Organization (WTO) dispute panel ruling siding with Canada and Mexico that could impose retaliation measures costing the United States more than $1 billion annually. COOL requirements for poultry, lamb, fish, and fruit, vegetables, and nuts were not repealed. The enacted appropriation further states that "none of the funds" may be used for horse slaughter and inspection under the Federal Meat Inspection Act. It also prevents the use of funds to purchase imported processed poultry products from China for use in the U.S. school lunch program and other feeding programs because of ongoing concerns about China's food safety programs. The enacted law also includes some other provisions that had been part of the House and Senate committee bills regarding USDA's rules governing the importation of beef from certain regions of Argentina and Brazil. Specifically, it includes language requiring USDA's Animal and Plant Health Inspection Service (APHIS) to "establish a prioritization process for APHIS to conduct audits or reviews of countries or regions that have received animal health status recognitions by APHIS," among other requirements. The enacted FY2106 Agriculture appropriation does not address the proposal in the Administration's FY2016 budget request to establish a single food agency to provide "focused, centralized leadership, a primary voice on food safety standards, and clear lines of responsibility and accountability that will enhance both prevention of and responses to outbreaks of foodborne illnesses." The Administration's proposal would transfer existing food safety functions into a new agency within HHS. This proposal differs from legislation introduced in the 114 th Congress as part of the Safe Food Act of 2015 ( H.R. 609 /DeLauro; S. 287 /Durbin). H.R. 609 and S. 287 would create a single independent Food Safety Administration (FSA) by transferring and consolidating the food safety authorities at FDA and USDA, as well as portions of agencies under the Department of Commerce. Some groups who have traditionally favored the creation of a single food safety agency oppose the Administration's plan because it calls for consolidation of food safety operations within HHS. Some contend HHS does not have the necessary expertise or adequate resources to manage an expanded food safety function; others claim USDA has a better record regarding food safety inspection and enforcement and worry that transferring these functions to HHS will lower standards for meat and poultry inspection. In general, large-scale reorganization of existing agencies is under the jurisdiction of the authorizing committees.

The Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies of the House and Senate Appropriations Committees oversee the budgets of two principal federal food safety agencies at the Food and Drug Administration (FDA) and the Food Safety and Inspection Service (FSIS). FDA, an agency of the Department of Health and Human Services, is responsible for ensuring the safety of the majority of all domestic and imported food products (except for meat and poultry products). FSIS, an agency at the U.S. Department of Agriculture, regulates most meat, poultry, and processed egg products. Combined appropriations and fees collected to cover food safety activities at FDA and USDA totaled an estimated $2.4 billion in FY2015, more or less evenly split between the two agencies. FSIS is responsible for roughly 10%-20% of the U.S. food supply, while FDA is responsible for the remaining 80%-90%. In the past few years, appropriators have increased funding for FDA's Foods program activities--one of the agency's primary program areas focused on food safety activities--more than doubling it from $435.5 million in FY2005 to $903.4 million in FY2015. In addition, FDA's food safety activities receive other program-level funding as part of FDA's overall budget. (FDA's Foods program accounts for about one-third of FDA's total appropriation.) FDA reports that food safety funding at FDA totaled $1.2 billion in FY2015. The FY2016 Agriculture appropriation was enacted in December 2015, as part of an omnibus appropriations act (P.L. 114-113). For FDA's food safety activities, including Food Safety Modernization Act (FSMA, P.L. 111-353) implementation, the enacted FY2016 appropriation provides for a $104.5 million increase in budget authority, nearly matching that requested in the Administration's FY2016 budget ($109.5 million). This could raise the budget authority for FDA's food safety activities to more than $1.3 billion annually. The enacted FY2016 appropriations provide $987.3 million for FDA's Foods program, which is identical to the amount requested by the Administration. Separately, for FSIS, the enacted FY2016 Agriculture appropriation is $1.015 billion, above the Administration's requested appropriation ($1.012 billion). These congressional appropriations would be augmented by existing (currently authorized) user fees. The Administration's FY2016 request for FDA and FSIS proposed a series of new user fees to augment both agencies' food safety activities. As in previous budget debates, however, appropriators did not include any new user fee proposals as part of either agency's FY2016 appropriations. The FY2016 appropriation further contains a number of policy riders for a range of FDA and USDA food safety and other food-related programs. Increased funding for food safety activities at FDA is largely in response to additional responsibilities following the enactment of the FDA FSMA in the 111th Congress. FSMA was the largest expansion of FDA's food safety authorities since the 1930s. FSMA authorized additional appropriations and staff for the agency's food safety activities, and also provided limited additional funding through industry-paid user fees. However, according to FDA, during the past five years (FY2011-FY2015) it has received increases to its funding base totaling $168 million for enacted changes to its food safety programs. Previously, FDA had reported that an additional $400 million to $450 million per year above the FY2012 base is needed to fully implement FSMA. FDA officials continue to note that without additional funding there will be a significant funding gap for FSMA implementation. FSMA did not directly address meat and poultry products under USDA's jurisdiction.

In 2003, Class Action Fairness Acts were reintroduced in the House and Senate after previouslegislation had died in the Congress. (1) Generallysimilar in content, each bill -- H.R. 1115 , and S. 274 / S. 1751 (2) -- has threemain sections: (1) an amendmentto the federal diversity statute, 28 U.S.C. 1332; (3) (2) a provision regarding removal; (4) and (3) aconsumer class action "bill of rights." (5) Section 1. Short Title (H.R. 1115 and S.274/S. 1751). (6) The Act may becited as the "Class ActionFairness Act of 2003." This section also states that it amends title 28 of the United States Code. Section 2. Findings and Purposes of the Act. Both bills set out Congress' findings describing the: (1) circumstances in which class actions arevaluable to our legal system; (2) abuses of the class action process that have harmed class memberswith legitimate claims and defendants that have acted responsibly, adversely affected interstatecommerce, and undermined public respect for our judicial system; (3) the manner by which classmembers have been harmed by a number of actions taken by plaintiffs' lawyers, which provide littleor no benefit to class members as a whole, including (i) plaintiffs' lawyers receiving large fees, whileclass members are left with coupons or other awards of little or no value, (ii) unjustified rewardsmade to certain plaintiffs at the expense of other class members, and (iii) confusing published noticesthat prevent class members from being able to fully understand and effectively exercise their rights;(4) abuses in class actions which undermine the national judicial system, the free flow of interstatecommerce, and the concept of diversity jurisdiction as intended by the framers of the United StatesConstitution, in that State and local courts are (i) keeping cases of national importance out of federalcourt, (ii) sometimes acting in ways that demonstrate bias against out-of-state defendants, and (iii)making judgments that impose their view of the law on other states and bind the rights of theresidents of those states. Section 3. Consumer Class Action Bill of Rights and ImprovedProcedures for Interstate Class Actions. These sections would add seven (five in H.R. 1115 ) new sections to 28 U.S.C. which are intended to provide greater protectionsfor class members. In particular, section 3 would add the following: Section 1711-Judicial scrutiny of coupon and other noncash settlements (Section 1712 in S. 274/S. 1751) (7) This provision is aimed at certain proposed settlements of class actions, in which the plaintiffs' lawyer and the defendant work out a settlement that provides class members with essentiallyvalueless coupons while rewarding the lawyers with substantial attorneys' fees. To address thisproblem, this section provides that a judge "may approve a proposed settlement under which theclass would receive noncash benefits or would otherwise be required to expend funds in order toobtain part or all of the proposed benefits only after a hearing to determine whether, and making awritten finding that, the settlement is fair, reasonable, and adequate for class members." S. 2062 would require that attorneys fees be based either on (a) the proportionate value of the coupons actually redeemed by class members or (b) the hours actually billed inpresenting the class action. Section 1712-Protection against loss by class members (Section 1713 in S. 274/S. 1751) This provision provides that a judge may not approve a class action settlement in which the class member will be required to pay attorney's fees that would result in a net loss to the classmembers until after a hearing to determine whether the nonmonetary benefits to the class outweigh(or substantially outweigh in S. 274 ) the monetary loss, and if so making a writtenfinding to that effect. Section 1713-Protection against discrimination based on geographic location (Section 1714 in S. 274/S. 1751; deleted in S.2062) This provision provides that a settlement may not award some class members a larger recovery than others solely because the favored members of the class are located closer to the courthouse inwhich the settlement is filed. Section 1714-Prohibition on the payment of bounties (Section 1715 in Section in S. 274/S. 1751; deleted in S.2062) This provision provides that a class action may not be settled on terms that award special and disproportionate bounties to the named class representative. A class representative will, however,be able to be compensated for his reasonable time or costs that were required to be expended infulfilling his obligations as a class representative. Section 1715-Class action definitions (Section 1711 in S. 274/S. 1751) (1) Class Action-The term is defined to include any civil action filed in federal district court under Rule 23 of the Federal Rules of Civil Procedure, as well as actions filed under similar rulesin state court that have been removed to federal court. (2) Class Counsel-The term is defined as "the persons who serve as the attorneys for the class members in a proposed or certified class action." (3) Class Members-The term is defined as "the persons who fall within the definition of the proposed or certified class action." (4) Plaintiff Class Action-The term is defined as "a class action in which class members are plaintiffs." (5) Proposed Settlement-The term is defined as "an agreement that resolves claims in a class action, that is subject to court approval and that, if approved, would be binding on the classmembers." Section 1716-Clearer and simpler settlement information (In S. 274/S. 1751 only; see Section 7 in H.R. 1115-Enactment ofJudicial Conference Recommendations) This provision provides that class notices should present information in "plain English." The notices must be designed to attract the attention of class members by stating at the outset, in 18-pointtype, that the recipient is a plaintiff in a class action lawsuit and has legal rights that are affected bythe settlement described in the notice. In addition, the notice must offer: (A) the subject matter of the class action; (B) the members of the class; (C) the legal consequences of being a member of the class; (D) detailed information about any proposed settlement, (i) including a description of thebenefits for class members, (ii) the rights that class members will lose or waive through settlement,(iii) the obligations imposed on the defendant, and (iv) the amount of attorney's fee counsel will beseeking or, if not possible, a good faith estimate of such fee; (E) any other material matter. (8) S. 2062 would eliminate what was considered a complicated set of burdensome notice requirements for notice to potential class members and preserve the current federal law relatedto class notification. Section 1717. Notifications to appropriate federal and state officials (S.274/S. 1751 only) This provision requires defendants to notify the appropriate state and federal official of the particulars of any class action settlement and delays the effective date of the settlement until 90 daysafter they have done so. The appropriate federal officials include the Attorney General and in thecase of financial institutions the federal regulatory authorities. State officials entitled to noticeinclude the authorities with regulatory jurisdiction over a defendant in any state in which anymember of the class resides. Section 4. Federal District Court Jurisdiction of Interstate ClassActions. Article III of the Constitution protects out-of-state litigants against theprejudice of local courts by allowing for federal diversity jurisdiction when the plaintiffs anddefendants are citizens of different states. However, under current law, federal diversity jurisdictionfor a class action does not exist unless every member of the class is a citizen of a different state fromevery defendant, and every member of the class is seeking damages in excess of $75,000. (9) Thissection in both bills would change the law by providing additional protection for out-of-state litigantsby creating a minimal diversity rule for class actions and by determining satisfaction of theamount-in-controversy requirement by looking at the total amount of damages at stake. Under the proposals, federal district courts receive original jurisdiction over any class action in which the amount in controversy, exclusive of interest costs, exceeds $5,000,000 and in which(A) "any member of a class of plaintiffs is a citizen of a State different from any defendant;" (B)"anymember of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and anydefendant is a citizen of a State;" or (C) "any member of a class of plaintiffs is a citizen of a Stateand any defendant is a foreign state or a citizen or subject of a foreign state." This rule holds trueif less than one-third of the plaintiffs and the primary defendants come from the state where the suitis filed; has no application if two-thirds or more of the plaintiffs and the primary defendants comefrom the state where the suit is filed; and applies at the discretion of the federal court if more thanone-third but less than two-thirds of the plaintiffs and the primary defendants come from the statewhere the suit is filed. (10) In the exercise of their discretion, the federal courts must consider: (11) -- "Whether the claims asserted involve matters of national interstate interest" -- "Whether the claims asserted will be governed by laws other than those of the State in which the action was originally filed" -- "In the case of a class action originally filed in a State court, whether the class action has been pleaded in a manner that seeks to avoid Federal jurisdiction" -- "Whether the number of citizens of the State in which the action was originally filed in all proposed plaintiff classes in the aggregate is substantially larger than the number of citizensfrom any other State, and the citizenship of the other members of the proposed class isdispersed among a substantial number of States" -- "Whether 1 or more class actions asserting the same or similar claims on behalf of the same or other persons have been or may be filed." This section contains a similar class action definition as section 3, defining a class action as (A) any civil action filed pursuant to rule 23 of the Federal Rules of Civil Procedure or a similar statestatute or rule. It also deems to be class actions certain other types of civil actions: (1) an actionseeking monetary relief on behalf of persons who are not parties to the action (unless the namedplaintiff is the state attorney general); or (2) an action that asserts claims seeking monetary relief onbehalf of 100 or more persons, in which the claims involve common questions of law or fact and areto be jointly tried. (12) Again, in order that actions lacking national implications remain in state court, the minimal diversity rules does not apply in any action where "(A) two-thirds or more of the members of allproposed plaintiff classes in the aggregate and the primary defendants are citizens of the State inwhich the action was originally filed; (B) the primary defendants are States, State officials, or othergovernmental entities against whom the district court may be foreclosed from ordering relief; or (C)the number of members of all proposed plaintiff classes in the aggregate is less than 100." Section 5. Removal of Interstate Class Actions to Federal DistrictCourt. This section would allow class action lawsuits to be removed from statecourt to federal court, either by a defendant or by any plaintiff who is not a named or representativeclass member. (13) Section 6. Appeals of Class Action Certification Orders (H.R.1115 only). This section provides that orders granting or denying classcertification may be appealed if notice of appeal is filed within 10 days after entry of the order. Italso provides that discovery shall be stayed during the pendency of the appeal unless the judge findsthat specific discovery is necessary to preserve evidence or to prevent undue prejudice to a party. Section 6. Report on Class Action Settlements (Section 6 in S.274/S. 2062). This provision directs the Judicial Conferenceof the United States to report to the Judiciary Committees of the Senate and House ofRepresentatives within 12 months of the enactment with recommendations on the best practices tofurther ensure fairness in class action settlements with regard to class members and attorneys' feeswhich should appropriately reflect the extent and success of the attorneys' efforts. Section 7. Effective Date (Section 8 in H.R. 1115). This section provides that the legislation applies to any civil actioncommenced on or after the date of enactment. In the case of H.R. 1115 it also appliesto civil actions filed but not certified as class actions prior to enactment. An amendment adoptedby the House Judiciary Committee in reporting H.R. 1115 would apply the terms of thebill to some pending class action suits thereby causing them to be moved to federal courts thuschanging the original language that would make the legislation effective only after the bill wassigned by the President. Section 7. Enactment of Judicial Conference Recommendations(H.R. 1115 and S. 2062). This section, deferring the proposedclass action notification reforms, would put into effect the pending Federal Rule of Civil Procedure23 amendments simultaneously with the enactment of the bill should the bill pass prior to December1, 2003. Section 8. Effective Date (H.R. 1115 only). This section provides that the provisions apply to: (1) civil actionscommenced on or after the date of enactment of the bill, and (2) any civil action commenced beforethe date of enactment in which a class certification order is entered on or after the date of enactment. It further provides that in cases commenced before the date of enactment, the 30-day removal periodwould begin on the date on which the class certification order is entered by a state court. Section 8. Rulemaking Authority of Supreme Court and JudicialConference (S. 2062 only). This section provides the authority for theJudicial Conference and the Supreme Court to propose and prescribe the general rules of practiceand procedure for the federal courts. Section 9. Effective Date (S. 2062 only). This section provides that the legislation applies to any civil actioncommenced on or after the date of enactment. On June 12, 2003, the House of Representatives passed H.R. 1115 by a vote of 253-170. (14) As amended on the floor of theHouse, the bill would allow class actions to be movedfrom state to federal court if fewer than one-third of the plaintiffs in a case are from the same stateas the defendant, and the claims are at least $5,000,000 or more. (15) These amendments will broadenthe category of class action cases that would remain in state courts in two ways: (16) (1) the amendmentraises the aggregate amount in controversy required for federal court jurisdiction from $2,000,000and to $5,000,000, and (2) it would allow federal courts to exercise their discretion to returnintrastate class actions in which local law would apply after weighing five factors. This discretionwould only apply when more than one-third and less than two-thirds of the plaintiffs and the primarydefendants are citizens of the same state where the suit was filed. If less than one-third are citizensof the same state, the case would automatically be eligible for federal court jurisdiction under thenew diversity Rule 23 of the Federal Rules of Civil Procedure in H.R. 1115. Similarly,if more than two-thirds and the primary defendants are citizens of the same state where the case isfiled, it would not be subject to the new rules in the bill. On October 17, 2003, the Senate began the consideration of S. 274 . Everything following the enacting clause was struck and the text of S. 1751 (17) was inserted in lieuthereof and considered as original text for the purpose of amendment. (18) On October 21, 2003, Senator John Breaux introduced S. 1769 , "National Class Action Act of 2003," as an alternative bill which is considered to be much broader than S. 1751 . (19) On October 22, 2003, the Senate rejected, by one vote, (20) an attempt to limit debate on S. 1751 in the form of a cloture motion which in effect narrowed the chances forenactment of class action reform at this time. On December 15, 2003, Senator Dodd proposed Senate Amendment 2232 to S. 274 which was introduced in the Senate on January 20, 2004, (21) by Senator Grassley. Similarlanguage to that contained in Senate Amendment 2232 is also reflected in S. 2062 (theClass Action Fairness Act of 2004) which was introduced in the Senate on February 10, 2004 (22) andplaced on the Senate Calendar on February 11, 2004. (23) An attempt was made by the proponents of S. 2062 to move the bill on June 1, 2004, but it was withdrawn due to lack of support to end debate or for cloture which would haverequired 60 votes. (24) On July 8, 2004, the proponents of S. 2062 again failed to get 60 votes needed to proceed for further consideration of the bill. (25) The vote was 44-43. (26) This latest action willprobablyaid the demise of the legislation for this legislative year. Although balanced by the enhanced class member protection features, the jurisdictional and removal components of H.R. 1115 and S. 274 are much like theirantecedents in the 106th and107 th Congresses. Proponents argue: Class action process has been manipulated in recent years; (27) U.S. companies have been flooded with labor and employment litigation, much of which has been entirely without merit; (28) Proposed changes in the law will increase sanctions against lawyers who bring frivolous claims to court. (29) Opponents object that they: Would clog an already overburdened federal court system and slow the pace of certifying class action cases; (30) Are inconsistent with the principles of federalism; (31) Would make consumer and public interest litigation more difficult to bring, more expensive, and more burdensome. (32)

The House has passed H.R. 1115 and the Senate Judiciary Committee has reported out S. 274 (both styled the Class Action Fairness Act of 2003). Each (1) creates aconsumer class action bill of rights, and (2) allows the federal courts to try a greater number of largeclass action law suits (100 plaintiffs or more) arising out of state law where the parties come fromdiverse states. Current law requires that each plaintiff have suffered $75,000 in damages and thatthere be complete diversity before a state lawsuit may be filed in or removed to federal court, thatis to say all of the plaintiffs must be citizens residing in different states than all of the defendants. The bills ease the complete diversity requirement and eliminate the requirement of individualdamages of $75,000 as long as the damages suffered by the class as a whole is $5 million or more. The consumer class action bill of rights in each proposal contains safeguards which provide for judicial scrutiny of coupon and other noncash settlements, protection against a proposed settlementthat would result in a net loss to a class member, protection against discrimination based upongeographic location, and prohibition on a class representative receiving a greater share of the award. S. 274 / S. 1751 alone includes within its bill of rights explicit provisions for "plain English" settlement notices and settlement notifications for state and federalauthorities. H.R. 1115 instead defers to the notice reforms recommended in theamendments to Rule 23 of the Federal Rules of Civil Procedure forwarded to Congress by theSupreme Court on March 27, 2003. H.R. 1115 alone permits pre-trial review of a lowerfederal court's grant or denial of class certification and makes its provisions retroactively applicableto suits filed before the date of enactment (but prior to class certification). On October 21, 2003, Senator John Breaux introduced S. 1769 as an alternative bill which is considered to be much broader than S. 1751 . On December 15, 2003, Senator Dodd proposed Senate Amendment 2232 to S. 274 , introduced in the Senate on January 20, 2004, by Senator Grassley. Most of these amendmentsare also incorporated into S. 2062 (the Class Action Fairness Act of 2004) which wasintroduced by Senator Grassley in the Senate on February 10, 2004. On July 8, 2004, S. 2062 failed to get the 60 votes needed to proceed for further consideration which probably will aid the demise of the legislation for this legislative year.

In recent years, deficit reduction commissions, including the National Commission on Fiscal Responsibility and Reform, have recommended using an alternative measure of consumer price change to make inflation adjustments to federal programs government-wide. The proposal would change, for example, the way the Social Security cost-of-living adjustment (COLA) is computed, as well as COLAs under other federal programs. Rather than using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to compute the Social Security COLA, the proposal calls for basing the Social Security COLA on the Chained Consumer Price Index for All Urban Consumers (Chained CPI-U or C-CPI-U). In April 2013, a modified version of the Chained CPI-U proposal was included in President Obama's FY2014 budget. In general, the goal of the Chained CPI-U is to more accurately reflect how consumers alter their buying habits in response to changes in prices. The Chained CPI-U typically has risen more slowly than either the CPI-W or the traditional CPI-U, the Consumer Price Index for All Urban Consumers. Supporters of the proposal argue that the CPI-W overstates inflation and, therefore, overestimates how much money is needed for Social Security beneficiaries to maintain their standard of living. Opponents of the proposal, however, view using the Chained CPI-U to adjust Social Security benefits for inflation as a backdoor way of reducing benefits. They maintain that the market basket of goods and services purchased by the elderly is different from that of the general population around which the CPI is constructed. It is more heavily weighted with health care expenditures, which rise notably faster than the overall CPI, and thus opponents contend that the cost of living for the elderly is higher than reflected by the overall CPI. For this reason, some policy makers support using the experimental Consumer Price Index for the Elderly (CPI-E) to compute the Social Security COLA. The current discussion of a potential change in the way the Social Security COLA is computed has raised questions about indexing provisions in other federal entitlement programs. The purpose of this report is to identify key indexing provisions in major federal entitlement programs under current law and present the information in a summary table (see Table 1 ). The programs included in the table are based on the major mandatory spending programs and categories shown in The Budget and Economic Outlook: An Update, published by the Congressional Budget Office (CBO) in August 2011, with some modifications. For example, the Congressional Research Service (CRS) identified specific programs within CBO categories (such as "child nutrition") and included additional programs, such as Railroad Retirement, that are closely coordinated with the Social Security program. Although there are other federal entitlement programs with indexing provisions, the programs included in the table represent a majority of federal mandatory spending. Table 1 is not intended to address or fully explain all of the indexing provisions within the laws and regulations governing these programs. Rather, it is an overview and a general guide. The report also provides a description of the measures of consumer price change used to index various elements of these programs under current law and the measure of consumer price change that has been proposed for making inflation adjustments to a range of federal entitlement programs (the Chained CPI-U). It is not intended to evaluate the best measure of consumer price change for inflation adjustments within a particular program or programs. Similarly, broader issues, such as the technical aspects of different measures of consumer price change and the indexing of other items (for example, the federal poverty threshold and parameters of the tax code), are beyond the scope of this report. For information on how the Chained CPI-U is constructed and reported by the U.S. Bureau of Labor Statistics (BLS), see CRS Report RL32293, The Chained Consumer Price Index: What Is It and Would It Be Appropriate for Cost-of-Living Adjustments? , by [author name scrubbed]. For information on how Social Security benefits could be affected by using the Chained CPI-U to compute annual COLAs, see CRS Report R43363, Alternative Inflation Measures for the Social Security Cost-of-Living Adjustment (COLA) , by Noah P. Meyerson. BLS publishes the CPI-W and the CPI-U, whose month-to-month fluctuations reflect changes in the prices faced by consumers. More specifically, the change in the indexes is the average change in the retail price of a market basket composed of more than 80,000 items purchased by consumers at outlets (e.g., grocery stores and gasoline stations) in 87 urban areas across the nation. Changes in the prices of items in each area are averaged together using weights that reflect the items' importance in the spending of the CPI-W population and the CPI-U population. The national CPI-W and CPI-U are calculated by combining the local area data for all items in the market basket to obtain a U.S. city average. The rates of change in consumer prices as measured by the national CPI-W for all items and national CPI-U for all items have differed only slightly over time. In addition to their use in calculating constant-dollar estimates of other economic indicators (e.g., earnings), the national CPI-W and CPI-U, as well as indexes for specific goods and services (e.g., medical care), are used for inflation indexing by the federal government. The percentage change in the national CPI-W (all items) is the basis for determining the annual COLA of Social Security benefits, and the national CPI-U (all items) is the basis for determining certain features of the Earned Income Tax Credit, for example. In addition, the percentage change in the CPI-U for specific groups of items is used to inflation-adjust various features of other federal programs. For example, per-meal subsidies paid to schools under child nutrition programs are tied to changes in the CPI-U "food away from home" index (which is a combination of indexes for full-service meals and snacks, limited-service meals and snacks, food at employee sites and schools, food from vending machines and mobile vendors, and other food away from home). As part of its ongoing efforts to develop an index that more accurately measures changes in the cost of living, BLS developed the Chained CPI-U, also called the C-CPI-U. The population of the C-CPI-U and CPI-U are the same. The prices used to calculate the C-CPI-U, CPI-U, and CPI-W are the same. However, the formula for calculating the C-CPI-U better accounts for the ability of consumers to maintain their standard of living in the face of an increase in prices overall by changing their spending pattern toward items whose prices have increased more slowly and away from items whose prices have increased more quickly. Although the C-CPI-U was first published in 2002, the modified measure has not replaced the CPI-U or CPI-W and no federal program has used the C-CPI-U to date. Some members of the public policy community interested in curtailing growth of the U.S. budget deficit have proposed switching inflation-indexed federal programs and income tax provisions to the C-CPI-U, however. Because the C-CPI-U typically has risen more slowly than either the CPI-W and CPI-U, changing the basis for indexation could substantially lower outlays and raise revenues. But the proposal to switch from the CPI-W to the C-CPI-U has prompted concern in some quarters about the ability of Social Security beneficiaries to maintain their standard of living. Some have suggested instead changing to the experimental index for those at least 62 years of age (CPI-E) in the arguable belief that this index better reflects the elderly population's experience with inflation (i.e., this population's above-average spending on health care services whose prices have increased faster than overall prices). As shown in Table 1 , inflation adjustments affect many features of federal entitlement programs. The most recognized effect of inflation adjustments is on benefit levels. For example, monthly cash benefits, such as Social Security and Supplemental Security Income benefits, increase when a COLA is paid. Other types of benefits are indexed as well. Non-cash benefits provided under the Supplemental Nutrition Assistance Program (SNAP), for example, are indexed to reflect food-price inflation. Coverage amounts under Medicare's standard outpatient prescription drug benefit (Part D) are adjusted for inflation. Inflation adjustments also affect entitlement programs in ways that are less well known, from federal payments to providers to program eligibility requirements. For example, when a Social Security COLA is paid, the amount of wages subject to the Social Security payroll tax increases. Indexing affects the number of Medicare beneficiaries subject to higher income-related Part B and Part D premiums, as well as the amount of Medicare payments to providers. In another example, indexing affects cost-sharing amounts paid by Medicaid beneficiaries for prescribed drugs and for non-emergency services provided in an emergency room. Per-meal subsidies paid to schools, for example, under the National School Lunch program are indexed. Finally, indexing affects eligibility criteria for some programs, including Medicaid and the child tax credit. Generally, switching to the C-CPI-U to compute COLAs and index other elements of federal entitlement programs is considered as a cost-saving measure in an effort to reduce federal budget deficits. For example, CBO estimates that switching to the C-CPI-U to compute Social Security COLAs would reduce federal outlays by $31.0 billion over five years (FY2014-FY2018) and by $127.2 billion over 10 years (FY2014-FY2023). If applied on a government-wide basis, however, switching to the C-CPI-U could increase program costs in some cases. Under Medicare, for example, cost-sharing amounts for outpatient drugs paid by low-income beneficiaries who receive subsidies under Part D are indexed annually to the CPI-U under current law. Because the Chained CPI-U grows more slowly than the CPI-U when consumer prices increase, indexing cost-sharing amounts to the Chained CPI-U would result in an increase in federal Medicare spending. Similarly, consider the refundable portion of the child tax credit (referred to as the additional child tax credit or ACTC). Taxpayers must have earnings that exceed the refundability threshold to claim the ACTC. The lower the threshold, the greater the number of low-income taxpayers who become eligible for the refundable child tax credit. Indexing the refundability threshold to a lower inflation index would expand the availability of the refundable child tax credit. Additional considerations regarding use of the Chained CPI to index federal programs for inflation are reflected in congressional testimony by CBO on April 18, 2013. CBO stated, for example, Although many analysts consider the chained CPI to be a more accurate measure of the cost of living than the traditional CPI, using it for indexing could have disadvantages. The values of the chained CPI are revised over a period of several years, so affected programs and the tax code would have to be indexed to a preliminary estimate of the chained CPI that is subject to estimation error. Also, the chained CPI may understate growth in the cost of living for some groups. For instance, some evidence indicates that the cost of living grows at a faster rate for the elderly than for younger people, in part because changes in health care prices play a disproportionate role in older people's cost of living. However, determining the impact of rising health care prices on the cost of someone's standard of living is problematic because it is difficult to measure the prices that individuals actually pay and to accurately account for changes in the quality of health care. For more information on the programs referenced in the table, see the following CRS reports. Social Security : CRS Report R42035, Social Security Primer , by [author name scrubbed] Medicare : CRS Report R40425, Medicare Primer , coordinated by [author name scrubbed] and [author name scrubbed] Medicaid : CRS Report R43357, Medicaid: An Overview , coordinated by [author name scrubbed] Supplemental Security Income : CRS Report 94-486, Supplemental Security Income (SSI) , by [author name scrubbed] Earned Income Tax Credit : CRS Report R43805, The Earned Income Tax Credit (EITC): An Overview , by [author name scrubbed] and [author name scrubbed] Child Tax Credit : CRS Report R41873, The Child Tax Credit: Current Law and Legislative History , by [author name scrubbed] Unemployment Compensation : CRS Report RL33362, Unemployment Insurance: Programs and Benefits , by [author name scrubbed] and [author name scrubbed] SNAP : CRS Report R42505, Supplemental Nutrition Assistance Program (SNAP): A Primer on Eligibility and Benefits , by [author name scrubbed] Child Nutrition Programs : CRS Report R42353, Domestic Food Assistance: Summary of Programs , by [author name scrubbed] and [author name scrubbed] Civil Service Retirement System / Federal Employees Retirement System : CRS Report 98-810, Federal Employees' Retirement System: Benefits and Financing , by [author name scrubbed] Military Retirement : CRS Report RL34751, Military Retirement: Background and Recent Developments , by [author name scrubbed] and [author name scrubbed] Veterans Disability Compensation : CRS Report RL34626, Veterans' Benefits: Disabled Veterans , by [author name scrubbed] et al. Veterans Pensions : CRS Report RS22804, Veterans' Benefits: Pension Benefit Programs , by [author name scrubbed] and [author name scrubbed] Dependency and Indemnity Compensation : CRS Report R40757, Veterans' Benefits: Dependency and Indemnity Compensation (DIC) for Survivors , by [author name scrubbed] Veterans Educational Assistance : CRS Report R42785, GI Bills Enacted Prior to 2008 and Related Veterans' Educational Assistance Programs: A Primer , by [author name scrubbed] Veterans Educational Assistance : CRS Report R42755, The Post-9/11 Veterans Educational Assistance Act of 2008 (Post-9/11 GI Bill): Primer and Issues , by [author name scrubbed] Veterans Vocational Rehabilitation and Employment Program : CRS Report RL34627, Veterans' Benefits: The Vocational Rehabilitation and Employment Program , by [author name scrubbed] Railroad Retirement Board : CRS Report RS22350, Railroad Retirement Board: Retirement, Survivor, Disability, Unemployment, and Sickness Benefits , by [author name scrubbed]

In recent years, various proposals have been discussed in the context of ways to reduce federal budget deficits. One of these proposals calls for the use of a different measure of consumer price change to index various provisions of federal programs, including cost-of-living adjustments (COLAs). For example, under current law, the Social Security COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Under the proposal, the Social Security COLA would be based instead on the Chained Consumer Price Index for All Urban Consumers (Chained CPI-U or C-CPI-U). Because the goal of the Chained CPI-U is to better reflect how consumers alter their buying habits in response to changes in prices, supporters of the proposal argue that it is a more accurate measure for computing COLAs and making other automatic program adjustments. Opponents, however, view the proposal as a backdoor way of reducing benefits because the Chained CPI-U typically has risen more slowly than either the CPI-W or the traditional CPI-U, the Consumer Price Index for All Urban Consumers. Some observers point out that the Chained CPI-U is published as a preliminary value that is subject to revision over a period of up to two years and that it may not accurately reflect the cost of living for certain groups, such as the elderly population. The current discussion of a potential change in the way the Social Security COLA is computed raises questions about indexing in other federal entitlement programs. The purpose of this report is to identify key indexing elements in major federal entitlement programs under current law and present the information in a summary table. As shown here, indexing affects more than benefit levels paid to individuals through COLAs. It also affects, for example, federal payments to providers and eligibility criteria for some programs. In addition, the report provides a brief description of the measures of consumer price change used to index various elements of these programs under current law, as well as the alternative measure of consumer price change (the Chained CPI-U) that has been proposed for computing Social Security COLAs and making inflation adjustments to other federal programs. This report does not evaluate the best measure of consumer price change for making automatic inflation adjustments in federal entitlement programs. In addition, broader issues, such as the technical aspects of different measures of consumer price change, potential implications of using an alternative measure of price change to index various elements of major federal entitlement programs, and the indexing of other items (for example, the federal poverty threshold and parameters of the tax code) are beyond the scope of this report. For technical information on how the Chained CPI-U is constructed and reported by the U.S. Bureau of Labor Statistics, see CRS Report RL32293, The Chained Consumer Price Index: What Is It and Would It Be Appropriate for Cost-of-Living Adjustments?, by [author name scrubbed]. For information on how Social Security benefits could be affected by using the Chained CPI-U to compute annual COLAs, see CRS Report R43363, Alternative Inflation Measures for the Social Security Cost-of-Living Adjustment (COLA), by Noah P. Meyerson.

Eligible veterans are entitled to receive certain military honors at their funerals. In general, these honors are provided by the Department of Defense (DOD) to eligible veterans who are interred or inurned at Department of Veterans Affairs (VA) national cemeteries, state veterans cemeteries, and private cemeteries. There is no cost to the family of a veteran for military honors. The current authorization and requirements for the provision of military honors at veterans' funerals are provided in statute at 10 U.S.C. Section 1491, and were established by Section 567 of Division A of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999, P.L. 105-261 ; and amended by the National Defense Authorization Act for Fiscal Year 2000, P.L. 106-65 . In the conference report accompanying P.L. 105-261 , the conferees provided the following justification for the authorization of military honors for veterans' funerals: The conferees agree that men and women have unselfishly answered the call to arms at tremendous personal sacrifice. The conferees agree that men and women, who have served honorably, whether in war or peace, deserve commemoration for their military service at the time of their death by an appropriate tribute. Burial honors are an important means of reminding Americans of the sacrifices endured to keep the Nation free. Prior to the enactment of P.L. 105-261 , there was no formal statutory requirement that the DOD provide military honors at veterans' funerals. However, such honors were customarily provided in accordance with the statutory requirement that a U.S. flag be presented to the next of kin of eligible veterans; military custom; and DOD Directive 1300.15, issued in 1985, which directed the military branches to provide to deceased veterans "appropriate tribute within the constraints of available resources." Active duty servicemembers and members of the Selected Reserve (which generally includes members of the National Guard) who die while in service are eligible for military funeral honors. In addition, federal law provides that veterans who served on active duty and former members of the Selected Reserve may be eligible for military funeral honors. A veteran who served on active duty is eligible if he or she meets one of the following requirements: served on active duty in the Army, Navy, Marine Corps, Air Force, Coast Guard, National Oceanic and Atmospheric Administration (NOAA) Commissioned Corps, or Public Health Service, or a civilian group granted veterans status pursuant to the GI Bill Improvement Act of 1977, P.L. 95-202 , and was discharged or released for reasons other than dishonorable; or served on active duty in the Army, Navy, Marine Corps, Air Force, Coast Guard, NOAA Commissioned Corps, or Public Health Service, or a civilian group granted veterans status pursuant to the GI Bill Improvement Act of 1977, P.L. 95-202 , and was disabled or died from a disease or injury incurred or aggravated in the line of duty (either active duty or inactive duty for training). A former member of the Selected Reserve is eligible if he or she meets one of the following requirements: completed at least one enlistment or, if an officer, the period of initial obligated service, in the Selected Reserve; or was discharged before completing an initial enlistment or, if an officer, the period of initial obligated service, in the Selected Reserve for a disability incurred or aggravated in the line of duty. A person may be ineligible for military funeral honors based on his or her type of discharge from the Armed Forces or involvement in a capital crime. In addition, a person may be ineligible for military funeral honors if the circumstances surrounding the person's death or other circumstances specified by the Secretary of Defense are such that military funeral honors would bring discredit upon the person's service or former service. A person who was discharged from active duty or the Selected Reserve under dishonorable conditions is ineligible for military funeral honors. Current DOD instruction provides that the following specific types of discharges make a person ineligible for military funeral honors: dishonorable discharge; bad conduct discharge; dismissal from service awarded by courts-martial; an under other than honorable conditions discharge; and an officer resignation for the good of the service in lieu of courts-martial, which results in a discharge characterization of under other than honorable conditions. A person is ineligible for military funeral honors if he or she is convicted of a federal capital crime, the conviction is final, and the sentence has not been commuted by the President; convicted of a state capital crime, the conviction is final, and the sentence has not been commuted by a governor of a state; found by the Secretary of Veterans Affairs or, in the case of a burial or inurnment at Arlington National Cemetery, the Secretary of the Army by clear and convincing evidence and after the opportunity for a hearing, to have committed a federal or state capital crime but has not been convicted of this crime due to death or flight to avoid prosecution. For the purposes of determining eligibility for military funeral honors, a federal capital crime is any crime under federal law for which a sentence of life imprisonment or death may be imposed. A state capital crime is the willful, deliberate, or premeditated unlawful killing of another human being for which a sentence of life imprisonment or death may be imposed under state law. A person ineligible for military funeral honors based on involvement in a capital crime is also ineligible for interment or inurnment in a VA national cemetery, Arlington National Cemetery, or any military cemetery. The denial of eligibility for military funeral honors for persons involved in capital crimes began in 1997 with the enactment of P.L. 105-116 , which denied eligibility for interment or inurnment in a VA national cemetery or Arlington National Cemetery to those involved in such offenses. In addition, this legislation made the prohibition of such interments in state veterans' cemeteries a condition of receiving grants from the VA to establish, expand, or approve such cemeteries. Under the provisions of P.L. 105-116 , a person convicted of a federal capital crime was denied eligibility for interment or inurnment in VA national cemetery or Arlington National Cemetery only if he or she was sentenced to death or life imprisonment and for a state capital crime only if sentenced to death or life imprisonment without the possibility of parole. This permitted persons convicted of state capital crimes but given the opportunity for parole to be interred or inurned in national cemeteries. Among the reasons cited for the passage of P.L. 105-116 was to prevent Timothy McVeigh, an Army veteran convicted of federal offenses in the 1995 bombing of the Alfred P. Murrah Federal Building in Oklahoma City, OK, from being buried in a national cemetery. Speaking in support of the legislation, which unanimously passed the Senate and passed the House of Representatives by unanimous consent, Representative Joe Knollenberg stated, As pictures of the Oklahoma City bombing were brought into the lives of everyone across this great country, no one watched with more horror than I did. It will always remain ingrained in our hearts, our minds, and our souls. Like the rest of the Nation, I was saddened more by the fact the person responsible for killing 168 people in the most heinous domestic terrorist act ever committed could receive a hero's burial with taps, a 21-gun salute, and a flag-draped coffin. The denial of eligibility based on involvement in a capital crime was extended to military funeral honors in 2006 with the enactment of Section 662 of the National Defense Authorization Act for 2006, P.L. 109-163 . This legislation also replaced the requirement that a person be sentenced to death or life imprisonment for a federal capital crime or death or life imprisonment without parole for a state capital crime with the requirement that a federal or state capital crime conviction be final, thus eliminating the possibility of a person sentenced to life imprisonment with parole from being interred or inurned in a national cemetery or given military funeral honors. Russell Wayne Wagner was an honorably discharged Army veteran of the Vietnam War who in 1994 was convicted of killing a married couple in Maryland and sentenced to two life sentences with the possibility of parole. Wagner died in prison in 2005, before enactment of P.L. 109-163 , which would have affected his case in two ways. First, because prior to the enactment of P.L. 109-163 , a sentence of life imprisonment without parole was required to deny interment or inurnment at a national cemetery, Wagner, whose sentence included the possibility of parole, was inurned at Arlington National Cemetery. Second, because the law prior to the enactment of P.L. 109-163 did not prohibit the provision of military honors to persons involved in capital crimes, Wagner's funeral at Arlington National Cemetery included such honors. Concerns raised by the family of Wagner's victims were cited as a reason for enactment of P.L. 109-163 . This law would have prevented Wagner from his inurnment with military funeral honors at Arlington National Cemetery. The victims' son testified at a Senate hearing in support of the legislation. Although P.L. 109-163 ensured that in the future a person involved in a capital crime, regardless of parole status, would be denied interment or inurnment in a national cemetery and military funeral honors, it did not affect the physical placement of the cremated remains of Wagner, which remained at Arlington National Cemetery. Section 404 of the Veterans Benefits, Health Care, and Information Technology Act of 2006, P.L. 109-461 , enacted in 2006, ordered the Secretary of the Army to remove Wagner's cremated remains from Arlington National Cemetery and return them to his family. Federal law prescribes the minimum elements required for military funeral honors. These include a funeral honors detail of at least two non-retired uniformed members of the Armed Forces, the folding and presentation of a U.S. flag to the family of the deceased, and the playing of Taps. Each branch of the Armed Forces is free to augment these minimum components with additional elements such as firing parties, color guards, or additional participating military personnel. The funeral honors detail must consist of at least two non-retired members of the Armed Forces in uniform, with at least one member being from the deceased's branch of service. The funeral honors detail may consist of active duty members of the Armed Forces or members of the Ready Reserve, including the National Guard. Members of the funeral honors detail are generally drawn from local military units. Federal law allows the funeral honors detail to be augmented by retired members of the Armed Forces and members of veterans and other organizations approved by the Secretary of Defense. The DOD established the Authorized Provider Partnership Program (AP3) to authorize volunteers to augment funeral honors details. AP3 participants are commonly members of Veterans Service Organizations (VSOs) recognized by the VA pursuant to federal law or regulations, other veterans groups, and Reserve Officer Training Corps (ROTC) detachments. AP3 participants may augment the funeral honors detail by serving as members of color guards, firing parties, pallbearers, or buglers. AP3 members are selected and trained by local military base commanders. Members of the Ready Reserve, including the National Guard, who serve on a funeral honors details are entitled to a daily stipend of $50 as set in law. AP3 members are entitled to either reimbursement for travel and other expenses related to their participation in funeral honors details or a $50 daily stipend which is set by the DOD. AP3 members may also be provided with assistance in obtaining required equipment or uniforms, such as access to military uniform supply stores. Taps is a bugle call that has been used by the U.S. Armed Forces since the Civil War. It has been used at military funeral ceremonies since at least 1891 and the playing of Taps is a required component of military funeral honors. Taps may be played by a live bugler from the military or AP3 program, or a recorded version may be played via music player or a ceremonial bugle. A ceremonial bugle has an electronic device in the bell of the bugle that plays a recording of Taps while a member of the funeral honors detail holds the bugle in playing position. Persons entitled to military funeral honors are also entitled by law to a U.S. flag, referred to as a burial flag, to be used during their funeral. The burial flag is provided at no cost to the family of the deceased by the VA and is distributed through local VA offices and post offices. Regardless of how many funeral or memorial services are held for the veteran, the law authorizes only one burial flag per veteran. The flag is commonly draped over the casket of the deceased as follows in accordance with federal law: When the flag is used to cover a casket, it should be so placed that the union is at the head and over the left shoulder. The flag should not be lowered into the grave or allowed to touch the ground. After the playing of Taps, two members of the funeral honors detail fold the flag into a traditional tri-corned shape with only the union, or blue field, visible. The flag is then presented to the next-of-kin or other family member by an honors detail member in accordance with the following protocol: 1. Stand facing the flag recipient and hold the folded flag waist high with the straight edge facing the recipient. 2. Lean toward the flag recipient and solemnly present the flag to the recipient. 3. Recite the following statement, inserting the appropriate branch of service: On behalf of the President of the United States, (the United States Army; the United States Marine Corps; the United States Navy; or the United States Air Force), and a grateful nation, please accept this flag as a symbol of our appreciation for your loved one's honorable and faithful service. If there is no funeral honors detail, a funeral director may present the folded flag to the family. A number of Internet postings have suggested that the statement accompanying the flag presentation was changed to remove the reference to the President. No such change has been made. Rather, prior to 2012, there was no standard language for the presentation of the burial flag. However, effective August 17, 2012, the DOD standardized the flag presentation statement to its current form and invited the Coast Guard to use the same statement for its veterans. The eligibility requirements for interment or inurnment at Arlington National Cemetery, which is administered by the Department of the Army and not the VA, differ from, and are generally more stringent than, the requirements for eligibility at VA national cemeteries and general eligibility for military funeral honors. There are different eligibility requirements for ground burial and inurnment in the Columbarium and Niche Wall at Arlington National Cemetery. Once eligibility for ground burial or inurnment at Arlington National Cemetery is determined, honors are afforded according to rank and provided by the veteran's branch of service. Pursuant to legislation enacted on May 20, 2016 ( P.L. 114-158 ), civilians determined by law or the Secretary of Defense under the GI Bill Improvement Act of 1977 ( P.L. 95-202 ) to have performed active duty military service and been granted veterans status, such as Women's Air Force Service Pilots, are eligible for inurnment in the Columbarium or Niche Wall at Arlington Cemetery but not ground burial. Enlisted personnel at pay grades E-8 or below are entitled to Standard Military Honors, which consist of a casket team of body bearers, a firing party, and a bugler. Senior enlisted personnel at pay grade E-9, warrant officers, and commissioned officers entitled to Full Military Honors, which include Standard Military Honors and an escort platoon with size determined by rank; a military band; and the use of the caisson, if available. Colonels in the Army and Marine Corps are also entitled to the caparisoned (decorated) riderless horse, if available. General and flag officers, other high state officials, and the President are entitled to cannon or minute gun salutes of varying sizes depending upon rank. Effective January 2, 2009, all servicemembers who die from wounds received as a result of enemy action and are being interred, inurned, or memorialized at Arlington National Cemetery are eligible to receive Full Military Honors regardless of rank. Spouses and eligible dependents of persons eligible for interment or inurnment at Arlington Cemetery are entitled to a casket team of body bearers from the veteran's branch of service. Pursuant to Supreme Court's decision in United States v. Windsor , declaring Section 3 of the Defense of Marriage Act unconstitutional, same-sex spouses are eligible for interment or inurnment at Arlington National Cemetery and any VA national cemetery effective June 26, 2013.

Eligible veterans are entitled to receive military honors at their funerals. Federal law, enacted in 1999 (P.L. 105-261) and amended in 2000 (P.L. 106-65) provides that each eligible veteran shall be provided, at minimum, a two-person funeral honors detail, the playing of taps, and the folding and presentation of a U.S. flag to the family. The Department of Veterans Affairs (VA) issues these honors at no cost to the veteran's family. These honors can be augmented to include color guards, pallbearers, and firing parties provided either by the military or civilians in approved veterans or other organizations. Funeral honors at Arlington National Cemetery include additional elements according to the rank of the deceased. Persons involved in capital crimes are ineligible for military funeral honors. In 1997, Congress began prohibiting interment and inurnment in national cemeteries and military funeral honors for persons involved in federal or state capital crimes. In 2006, Congress passed a law (P.L. 109-461) ordering the cremated remains of a veteran who had been convicted of two counts of murder be removed from Arlington National Cemetery. In 2013, pursuant to the Supreme Court's decision in United States v. Windsor, same-sex spouses of eligible veterans became eligible for interment and inurnment in national cemeteries. Legislation enacted in 2016 (P.L. 114-158) permits civilians granted veterans status under federal law, such as Women's Air Force Service Pilots (WASPs), to be inurned in the Columbarium or Niche Wall at Arlington National Cemetery.

Real Estate Investment Trusts (REITs) are mutual funds made up of real estate and mortgageassets. In recent years, their performance has been stronger than broader market indicators, leadingto calls for inclusion of a REIT alternative in the Thrift Savings Plan (TSP) for federal workers. H.R. 1578 , the Real Estate Investment Thrift Savings Act, was introduced April12, 2005, to provide for an REIT option in the TSP. Hearings were held on the legislation April 19,2005, by the House Government Reform Subcommittee on the Federal Workforce and AgencyOrganization. Further hearings are scheduled for April 26, 2006. A companion bill, S. 2490 , was introduced in the Senate on April 13, 2006. This report summarizes the legal and economic history of REITs and the factors that havecontributed to recent strong performances of REITs as investment vehicles. It then addresses thearguments behind their possible inclusion as an investment alternative in the TSP. Introduced in the 1960s, Real Estate Investment Trusts (REITs) applied the mutual fundconcept to real estate. By buying an interest in a REIT, an investor could own a share of a numberof real estate assets, reducing the risks and transaction costs that accompany investment in a singlepiece of real estate. Congress made the REIT concept financially viable by enacting the Real EstateInvestment Trust Act of 1960, which exempted REITs from double taxation of shareholderdividends. That is, REIT income is not taxed at the trust level, but only after it has been distributedto shareholders. (Stock and bond mutual funds receive similar tax treatment.) To qualify for thistax exemption, REITs are required to distribute at least 90% of their income in the form ofdividends. A second piece of legislation critical to the development of the REIT market was the TaxReform Act of 1986, which permitted REITs to operate and manage property themselves. (Previously, they were permitted to be only passive investors.) The Tax Reform Act also channeledinvestment funds into REITs by restricting the use of limited real estate partnerships as tax shelters. Individual REITs tend to specialize in certain kinds of real estate, but taken as a whole, theREIT industry invests in the broad range of commercial and residential (primarily multi-family)properties. Figure1 shows the distribution of REIT assets at the end of 2005. Figure 1. REIT Assets by Type, December 31, 2005 Source: National Association of REITs. There are two basic types of REITs: equity and mortgage. Equity REITs develop, own, andoperate income-producing real estate and provide tenant services, whereas mortgage REITs lendmoney to real estate owners and operators or acquire loans or mortgage-backed securities. A few hybrid REITs operate in both modes. The investment characteristics of the two typesdiffer: mortgage REITs are highly sensitive to interest rates because their profits depend on thespread between the income from their loans and other debt assets and their own cost of funds. Asinterest rates have risen since 2004, the returns on investment in (and share prices of) mortgageREITs have fallen sharply. Equity REITs, on the other hand, are affected by a range of economic fundamentals besidesinterest rates. For example, REITs that invest in hotels are sensitive to corporate profits and otherfactors that affect business travel. Similarly, returns on investment in hospitals, office buildings, andshopping malls depend on a host of sector-specific, uncorrelated trends. REITs may be either private or publicly held companies. (2) Shares of publicly held REITsare traded on the stock markets like shares of any other corporation. As of the end of February 2006,there were 202 REITs listed on the stock exchanges, with a total market value of $368 billion. (Ofthe 202, 156 were equity REITs, 40 were mortgage REITs, and the remaining 6 were hybrids. Market capitalization of the classes was $335 billion, $27 billion, and $5 billion, respectively.) (3) Table 1 summarizes thegrowth of the publicly traded REIT market since 1975. Table 1. Number and Market Capitalization of Publicly TradedREITs, 1975-2005 Source: National Association of REITs. Figure 2. Standard & Poor's 500 vs. REIT Stock Index Indices of REIT stocks have outperformed broad market indicators such as the Standard &Poor's 500 since 2000. Figure 2 compares the two indices since 1997. What accounts for the recent performance of REIT stocks? First, the economic fundamentalshave been favorable. Following the stock market crash in 2000 and the September 11, 2001 attacks,the Federal Reserve lowered short-term interest rates to the lowest levels since the 1950s, greatlyreducing the cost of borrowed funds. Longer term rates, partly in response to the Fed moves andpartly because of a fall in post-9/11 investment demand, continued their decade-long decline,lowering the cost of funds most important to real estate funding considerably. Long rates, inparticular, have remained low by historical standards in 2006. In addition, consumer spending hasbeen strong since the end of the last recession in November 2001, which is good news for REITs thatinvest in resorts and retail structures, including shopping malls. Economic growth has been goodfor the industrial real estate sector, and improving business conditions have buoyed the hotel andlodging sectors, and are beginning to drive down the office vacancy rate in many parts of the country. A second factor has been a wave of mergers and going-private transactions in the industry. When a publicly traded REIT is acquired by another or taken private, shareholders receive apremium above the current market price for their stock. The prospect of a merger or buyout usuallyadds to the attraction of REIT shares, and drives prices up. A third -- and perhaps the most important -- factor behind rising REIT share prices has beenthe relatively poor performance of other investments. Since the market peak in 2000, stock yieldshave been much lower than during the 1990s. At the same time, low interest rates have meant thatreturns to fixed-income investments like corporate bonds, bank certificates of deposit, and U.S.Treasury notes have been meager by historical standards. The combination, according to a Standard& Poor's analysis, "has sent investor dollars surging into U.S. REITs in recent years." (4) Thus, performance of REIT shares is affected not only by the fundamentals of the real estatebusiness, but also by the quality of other investment opportunities. Figure 2 shows that the REITindex was negative during several periods in the late 1990s, not just because of problems in realestate markets and earnings, (5) but also because investors shifted funds to Nasdaq technologystocks and other "hot" sectors, where returns of 30% per year were considered sluggish. Future returns on any stock market investment are, of course, uncertain. Several factors makepredictions about REITs even more uncertain than most. As Table 1 shows, the market value ofREIT stocks has grown explosively since 1990. Since 2000 alone, market capitalization has morethan doubled. This suggests two things: (1) that publicly traded REITs have become much larger, though mergers, external debt andequity financings, as well as internally-generated growth, and (2) that investor perceptions of REITs have changed. The first point means that an investment fund that attempted to capture the aggregate returnof the full range of publicly traded REITs, as a TSP fund would presumably do, would in fact beinvesting in a shifting pool of firms and assets. As public REITs buy private funds or assets, or asthey are taken private, the volume and composition of the real estate assets that generate REITincome will not be constant, which implies that past behavior of REIT stocks may not be a reliableguide to future performance. On the second point, if investors move in and out of REITs in response to factors unrelatedto the state of the underlying commercial real estate market, the behavior of REIT stocks under anygiven set of market conditions can be expected to change. In 2000, a Wall Street Journal (6) article noted that"[h]istorically, REITs have behaved like stocks. But in the last two years, they have seemed morelike bonds, diving as interest rates rose." A recent Ibbotson Associates study found that the historicalcorrelation between REITs and small-capitalization stocks has broken down: Early in the 1990s, however, the market's perceptionof these securities began to shift as the REIT market grew along with investor understanding of thesector. In turn, shifts in the market began to alter the behavior patterns of this asset class. Since 1992the REIT market has more than quadrupled, and investors have begun to view these investmentsmore as real estate investments and less as simply domestic equity investments. Over the last 10years, correlations between REITs and more traditional asset classes have been declining, makingthem a significant source of portfolio diversification. (7) Together, these trends suggest that the investment characteristics of the present set of publiclytraded REITs may not hold constant over the years to come. In the short-term, the fact that REITs have outperformed the S&P 500 for several yearsrunning suggests that REIT stocks may be overvalued and due for a correction. Standard & Poor'sanalysis notes that the "cap rate," a measure of commercial property returns, was low in early 2006,suggesting that stock prices were higher than the fundamentals of the commercial real estate marketwould support. (8) Nevertheless, REIT stocks have risen by 13% since the beginning of 2006, seemingly in "defianceof common sense," according to the Wall Street Journal . (9) The Thrift Savings Plan (TSP) is a tax-deferred retirement savings vehicle for federalworkers, akin to "401(k)" plans for private sector employees. Although available to all federalemployees, it is particularly important to those covered by the Federal Employees Retirement System(FERS), whose contributions are partially matched by their federal agency. At present, the TSP hasfive investment vehicles, three of which are broad stock indexes. One of the stock funds tracks theS&P 500 index of major U.S.-listed companies (the C fund). The I fund tracks international stocksand the S fund invests in stocks not included in the S&P 500, including shares of small and mid-sizecompanies. The remaining two funds invest in bonds (the F fund) and government securities (theG fund). In addition, the TSP has five automatic "lifecycle" arrangements of investing among the fivevehicles, each geared toward a projected time frame over which accounts will remain in the TSP. At this time, the TSP does not allow for investment in individual stocks, nor in funds made up ofparticular economic sectors or industries (such as biotech, or aeronautics). The TSP hasapproximately 3.5 million participants and more than $180 billion in assets. On April 12, 2005, Chairman Jon Porter of the House Government Reform Subcommitteeon the Federal Workforce and Agency Organization introduced H.R. 1578 , the RealEstate Investment Thrift Savings Act, which would provide for a real estate stock index investmentoption under the TSP. The subcommittee held a hearing on April 19, 2005. Chairman Porter madethe case for the legislation as follows: What we are talking about today is a simple concept:DIVERSIFICATION. Basic economic principles dictate that investors should not place all of theireggs in one basket, but must spread their money and risk among different types of assets. A fewyears ago -- during the tech bubble collapse -- many Federal employees experienced setbacks in theirinvestment portfolio and did not have the option to invest substantially in REITs. Federal employeesshould not be left out in the cold. Adding a REIT fund option to the TSP is the next logical step.With its resilient earnings and lower volatility, real estate provides a sound investment over the longhaul. Such an investment is a valuable diversification tool, providing the possibility of strong returnsand risk reduction. (10) Chairman Porter also noted that the TSP offered five investment options, versus 16 for theaverage corporate 401(k) plan. Investment diversification is the cornerstone of modern portfoliotheory, which holds that the inclusion of highly risky assets in a portfolio can enhance overall returnsand does not imply a high level of risk to the portfolio, as long as the risks are not positivelycorrelated. If the correlation between REITs and the stock market has declined, as the Ibbotson studycited above finds, a REIT fund would offer TSP participants a way to hedge their investments instock funds: if the stock funds fell, the REITs would rise (or at least not fall as far), easing the painof stock market episodes such as the bear market of 2000-2002. At the same time, based on theirexpectations of future REIT performance, participants could move funds into REITs in search ofhigher yields. Thus, as Chairman Porter stated, a REIT fund may offer both "the possibility of strongreturns and risk reduction." (11) The TSP governing board and CEO, however, have recommended against the addition of aREIT fund. Their arguments, as set out at the 2005 hearing mentioned above, (12) may be summarized asfollows. The view of REITs as a hedge against stock market declines is complicated by the fact thatREIT stocks are already included in both the large and small stock funds currently offered by theTSP. (For example, nine REIT stocks are included in the S&P 500, which the TSP's C fund tracks.) Gary Amelio, the TSP executive director, noted in his 2005 testimony that the C and S stock fundsheld over a billion dollars in REIT shares, making TSP the thirteenth-largest holder of REITs in theUnited States. Thus, the hedging value of REITs is to an extent already built into the TSP: if REITsrise when other stocks fall, the aggregate indexes mirrored by the TSP funds will fall less than theywould have otherwise. Similarly, superior returns earned by REITs over any period are captured inthe aggregate return to the TSP stock funds. What the creation of a REIT fund would do is allow TSP participants to increase theproportion of REIT stocks in their portfolios beyond their weighting in broad indices such as theS&P 500. If their timing were right, TSP participants who chose the REIT option could outperformtheir peers who remained in the stock funds. But Figure 2 suggests that they would be choosing avolatile investment option that could lead to losses as well as gains. By offering only a few investment alternatives, the TSP is structured in a way thatdiscourages "return chasing." Conventional wisdom in financial theory is that many investors --particularly small investors -- tend to buy the stocks or mutual funds that did well in the lastreporting period and that this is generally an unsuccessful strategy, for two reasons: return chasersare always paying top-of-the-market prices and, by frequently reallocating their investments, theyincur high transaction costs. Gary Amelio noted that educational programs to discourage suchcounterproductive investment behavior would be expensive. (13) Another argument regarding the hedging and diversification benefits offered by new TSPfunds is that such alternatives ought to be offered (if they are needed) as part of a comprehensive,considered program, rather than piecemeal. If TSP investors would be better off with a REIT choice,observers ask why not add funds based on emerging markets, hedge funds, commodities, junk bonds,and so on? Two general arguments against such multiplication of investment options are made. Onedeals with fund expenses. Current TSP expenses are extremely low by industry standards -- "off thecharts," according to Andrew Saul (14) -- partly because the number of funds is limited. If annualexpenses go up by even a fraction of a percentage point, the effect on total investment returns overa 20- or 30-year time frame can be dramatic. Testimony from Barclays Global Investors, whichserves as a TSP investment manager, indicated that administration of a REIT fund, while desirablefrom a "pure investment perspective," would likely incur management and transaction costsconsiderably above present levels. (15) Second, there is some question whether a wide menu of investment choices is in the interestof TSP participants, many of whom are not (and do not care to become) expert in financial markets. Presenting unsophisticated investors with many choices may result in less-than-optimal behavior,including the chasing of returns (discussed above) or the selection of an unsuitable initial investmentallocation, which the participant may not correct later because the perceived costs of obtainingexpertise are too high. These arguments can be countered by the charge of "paternalism," and thecase for investor choice and self-direction is intuitively attractive. If, as neoclassical economicsassumes, individuals act rationally in their own self-interest, why should the government, or itsdesignees, decide where TSP participants can put their funds? However, a growing body of empirical and theoretical research, called "behavioral finance,"throws doubt on the notion that individual investors can be expected to make the decisions that arebest for themselves. (16) Behavioral finance identifies mistakes that investors make consistently, such as reliance uponinaccurate rules of thumb and being influenced by the form in which an investment opportunity ispresented, rather than the substance. These bad habits appear to be deeply rooted and not easilycorrected by education programs. A recent study of investment returns by defined-contribution plan participants found thatindividuals who chose an asset allocation or balanced fund (such as the TSP lifestyle options)achieved better returns than participants who make allocation decisions themselves. (17) Results like these suggestthat the neoclassical assumption that individuals can be relied upon to act rationally in their ownself-interest may be overly simplistic. This line of analysis seems to support the contention of theTSP directors that the current plan design, based on a few broad choices and low costs, "has beenrecognized by many impartial observers as an optimum approach." (18) S. 2490 , a companion bill to H.R. 1578 , was introduced by SenatorNorm Coleman April 3, 2006, thus bringing the issue to the Senate as well as the House. The HouseGovernment Reform Committee has scheduled new hearings on the subject for April 26, 2006. In March 2006, the Employee Thrift Advisory Council, an advisory panel made up of labor,management, and other federal employees, adopted a resolution opposing the addition of a REIToption to the TSP. Finally, a study has been commissioned by the Federal Retirement ThriftInvestment Board to review the existing TSP investment policy and consider the addition of moreoptions (including a REIT option), but publication is not expected until later in 2006.

Real Estate Investment Trusts (REITs) are mutual funds made up of real estate and mortgageassets. In recent years, their performance has been stronger than broader market indicators, leadingto calls for inclusion of an REIT alternative in the Thrift Savings Plan (TSP) for federal workers. At present, the TSP is limited to five savings vehicles, three of which are broad-based stock indexes.Proponents of inclusion cite greater diversification and participant choice in the TSP as well aspotentially higher returns as benefits of the proposal. The TSP board, while studying the matter, hasargued that changes should only occur as part of a comprehensive program, should not encourage"return chasing" by participants, and should maintain the current very low cost structure of the TSP. H.R. 1578 , the Real Estate Investment Thrift Savings Act, was introduced April12, 2005, to provide for an REIT option in the TSP. Hearings were held on the legislation April 19,2005, by the House Government Reform Subcommittee on the Federal Workforce and AgencyOrganization. Further hearings are scheduled for April 26, 2006. A companion bill, S. 2490 , was introduced in the Senate on April 13, 2006. This report summarizes the legal and economic history of REITs and the factors that havecontributed to recent strong performances of REITs as investment vehicles. It then addresses thearguments behind their possible inclusion as an investment alternative in the TSP. This report will be updated as events warrant.

The U.S. Centers for Disease Control and Prevention (CDC) plays a central role in shaping and implementing U.S. global health policy. The agency is one of three agencies tasked with leading the Global Health Initiative (GHI), an initiative created by the Obama Administration to coordinate ongoing presidential health initiatives and raise investments in other health areas, including maternal and child health, neglected tropical diseases, and family planning and reproductive health ( Figure 1 ). CDC is also an implementing partner in three presidential initiatives that comprise the bulk of U.S. global health assistance: the President's Malaria Initiative (PMI) and the Neglected Tropical Diseases (NTD) Program, both of which are coordinated by USAID, and the President's Emergency Plan for AIDS Relief (PEPFAR), which is coordinated by the State Department. In addition, CDC manages its own bilateral health programs. This report highlights the health-related activities conducted by CDC, outlines how much the agency has spent on such efforts from FY2001 to FY2011, and highlights FY2012 proposed funding levels. Since 1958, CDC has been engaged in global health efforts. At first, CDC's global health engagement focused primarily on malaria control. CDC's global health mandate has grown considerably since then. In 1962, CDC played a key role in the international effort that led to smallpox eradication and in 1967 expanded its surveillance efforts overseas to include other diseases, when the Foreign Quarantine Service was transferred to CDC from the U.S. Treasury Department. As the mission of CDC has expanded, so have the authorities under which it operates. Today, CDC is a partner in a number of global disease control and prevention efforts, including those related to HIV/AIDS, influenza (flu), polio, malaria, measles, tuberculosis (TB), and emerging diseases. In addition, CDC's global health efforts aim to address other global health challenges, such as chronic disease, injury prevention, child and maternal health, and environmental health concerns. Congress appropriates funds to CDC for global health efforts through Labor, Health and Human Services, and Education (Labor-HHS) appropriations. The bulk of funds for CDC's global health programs are provided by Congress to the Center for Global Health, historically through five main budget lines: Global HIV/AIDS, Global Malaria, Global Disease Detection, Global Immunization, and Other Global Health. CDC programs are implemented bilaterally and in cooperation with other U.S. agencies, international organizations, foreign governments, foundations, and nonprofit organizations. The section below explains these programs, and the Appendix illustrates funding levels between FY2001 and FY2012. In addition to direct congressional appropriations, the CDC Center for Global Health receives funding from other sources in support of its global health initiatives. For example, CDC receives support transferred from the Office of the Global AIDS Coordinator (OGAC) at the U.S. Department of State, for the implementation of PEPFAR programs, and from USAID for its role in PMI and the NTD Program, among other programs. These funds are not included in the Appendix . CDC launched its Global AIDS Program (GAP) in 2000 under the LIFE Initiative. GAP, now called the Division of Global HIV/AIDS (DGHA), supports HIV/AIDS interventions through technical assistance to over 75 PEPFAR countries, with in-country presence in 41 countries or regional offices, and offers technical assistance in an additional 29 others. CDC employs medical officers, epidemiologists, public health advisors, laboratory and behavioral scientists, and other public health experts to assist host country governments, local public health institutions, and other indigenous partners working on a range of HIV/AIDS-related activities. The key objectives of DGHA are to implement and strengthen HIV prevention, treatment, and care services and to bolster health systems. Specific activities within the projects include developing and implementing integrated evidence-based prevention, care, and treatment programs; building sustainable public health capacity in laboratory services and systems; evaluating the scope and quality of global HIV/AIDS programs; strengthening in-country capacity to design and implement HIV/AIDS surveillance systems and surveys; and supporting host government capacity to monitor and evaluate the process, outcome, and impact of HIV prevention, care, and treatment programs. In 2003, President Bush announced PEPFAR to create a coordinated U.S. approach for fighting global HIV/AIDS. Following the launch of the $15 billion, five-year initiative, CDC's spending on global HIV/AIDS programs increased significantly, due to transfers from the State Department. Appropriations for CDC's HIV/AIDS programs, however, declined slightly from $124.9 million in FY2004 (excluding support for programs to prevent the transmission of HIV from mother to child) to $118.7 million in FY2011. From FY2004 to FY2008, OGAC transferred some $3.4 billion to CDC for global HIV/AIDS activities. When OGAC transfers are added, from FY2004 to FY2008, HIV/AIDS spending accounted for nearly 80% of all spending by CDC on global health. In FY2009, OGAC transferred about $1.3 billion to CDC for implementation of PEPFAR programs and has not yet released how much it transferred to CDC for FY2010 or FY2011. According to the 2012 Congressional Budget Justification (CBJ), U.S. agencies, including CDC, supported HIV/AIDS treatments for 3.2 million people by the end of FY2010. When PEPFAR was announced, in 2003, only 66,911 people were receiving treatment. CDC has reportedly played an important role in expanding access to HIV/AIDS treatments as well as preventing the transmission of HIV/AIDS from mother to child. Between 2004 and 2009, PEPFFAR support enabled 334,000 babies, whose mothers were HIV-positive, to be born HIV-free. By the end of FY2010, an additional 114,000 infants were born HIV-free through PEPFAR-supported programs. According to the latest estimates, which were based on data collected in 2002, 1.4 million children under age five die annually from vaccine- preventable diseases (VPDs). Several experts, including at the CDC, assert that expanding vaccine coverage is one of the most cost-effective ways to improve global health. Use of basic vaccines, including polio, measles, and DPT, prevents an estimated 2.5 million deaths per year among children younger than five. CDC has increasingly supported efforts to prevent the transmission of vaccine-preventable diseases, particularly polio and measles. CDC global immunization activities primarily focus on children younger than age five who are at the highest risk of contracting polio, measles, and other VPDs. Appropriations in support of these efforts have grown from $3.1 million in FY1991 to $150.8 million in FY2011. Nearly all of the funds that Congress provides CDC for global immunizations are earmarked for polio and measles interventions. CDC leverages funds from other sources to prevent other VPDs, strengthen routine immunization practices, and respond to global requests for technical assistance on immunization-related epidemiologic and laboratory science. For example, CDC has played an important role in introducing newer vaccines globally, including the Hib (which prevents meningitis, pneumonia, epiglottitis, and other serious infections caused by an influenza virus) and meningococcal and rotavirus vaccines (which can prevent severe diarrhea and vomitting). CDC implements immunization programs bilaterally and through international partnerships with groups such as the World Health Organization (WHO), the United Nations Children's Fund (UNICEF), the Pan-American Health Organization (PAHO), the World Bank, the American Red Cross, and Rotary International. CDC staff are detailed to these organizations and offer technical and operational support in improving vaccine-preventable disease surveillance and properly using immunizations. In addition, CDC officials serve on the Global Alliance for Vaccines and Immunization (GAVI Alliance) and act as implementing partners in a number of initiatives, including GAVI's Hib and Accelerated Vaccine Introduction Initiatives and the Meningitis Vaccine Project, all of which seek to accelerate introduction of new or underutilized vaccines in developing countries that can reduce child mortality. In partnership with WHO and UNICEF, CDC developed the Global Immunization Vision and Strategy for 2006-2015 (GIVS), which among other goals, outlines how the international community will collaborate to reduce vaccine-preventable deaths by at least two-thirds from 2000 levels. The GIVS initiative has evolved into the "Decade of Vaccines" initiative, a collaborative effort spearheaded by WHO, UNICEF, the National Institutes of Health, and the Bill & Melinda Gates Foundation, aimed at increasing coordination across the international vaccine community and create a Global Vaccine Action Plan. The Decade of Vaccines aims to sustain the gains made over the past decades in eradicating polio and eliminating measles (see below) by helping to ensure universal application of routine immunizations and using those efforts to strengthen health systems. From FY2001 to FY2011, CDC spent roughly $1.5 billion on expanding global access to polio and measles immunizations. Polio is a highly contagious virus that mostly affects children under five years of age. There is no cure for polio; it can only be prevented through immunization. Less than 1% of those who contract polio (one in 200) become irreversibly paralyzed. Between 5% and 10% of those who become paralyzed die of respiratory failure--when the lungs become paralyzed. As a result of global eradication efforts, polio cases have declined by more than 99% from an estimated 350,000 cases in 1998 to 1,349 cases reported in 2010. CDC provides technical expertise and support to national governments and international organizations in support of the global effort to eradicate polio. Its laboratory support is an important component of such efforts. Over more than 20 years, CDC has helped countries build laboratory capacity in polio, resulting in a global polio network that now involves 145 laboratories around the world, which processed almost 200,000 lab specimens in 2010. According to CDC, polio laboratory methods pioneered by the agency have become the gold standard in the global polio laboratory network. In its multilateral efforts, CDC works closely with the other founding partners of the Global Polio Eradication Initiative--WHO, UNICEF, and Rotary International--and houses the global reference laboratory for polio. From FY2001 to FY2011, CDC has spent approximately $1.1 billion on polio immunizations worldwide. Measles is another highly contagious virus that mostly affects children younger than five years of age. In 2008, measles killed about 164,000 people worldwide, most of whom were children. Healthy people usually recover from measles or suffer moderately from the disease. Measles severely affects those who are poorly nourished, particularly those suffering from Vitamin A deficiency or immune suppressing diseases, such as HIV/AIDS. Those who survive severe measles infection may become blind or suffer from encephalitis (an inflammation of the brain), diarrhea and related dehydration, ear infections, or respiratory infections such as pneumonia. Among populations with high levels of malnutrition and a lack of adequate health care, up to 10% of measles cases result in death. CDC has played an important role in eliminating measles in several countries across the globe. In 1996, for example, the agency partnered with PAHO to develop a measles elimination strategy that led to the elimination of the diseases in the Americas by 2002. The agency is also responsible for the technical and much of the financial support for the Measles/Rubella LabNet, a network of 679 laboratories worldwide that were built on the framework of the aforementioned polio laboratory network. CDC seeks to expand the Measles/Rubella LabNet to meet the global goal to eliminate measles worldwide. From FY2001 through FY2011, CDC spent about $438.9 million on global measles control activities in 42 sub-Saharan African countries and 6 Asia ones. With the funds, CDC has purchased over 200 million measles vaccine doses and provided technical support to ministries of health in those countries. Key technical support activities include planning, monitoring, and evaluating large-scale measles vaccination campaigns; conducting epidemiological investigations and laboratory surveillance of measles outbreaks; and conducting operations research. Along with WHO, UNICEF, the United Nations Foundation, and the American Red Cross, CDC is a partner in the Measles Initiative, which has facilitated the precipitous decline in measles-related deaths from 2000 to 2008. During this period, about 576 million children who live in high risk countries were vaccinated against the disease. As a result, measles-related deaths decreased globally by 74% during that time. The greatest improvements in measles death rates occurred in the Middle East and sub-Saharan Africa, where measles deaths declined by about 90% by 2006, some four years earlier than the 2010 target date. At the end of 2008, CDC's global measles campaign contributed to the decline in measles-related deaths from an estimated 733,000 deaths to about 164,000 in 2008. Through its malaria programs, CDC conducts research and engages in prevention and control efforts. CDC staff provide technical assistance that helps malaria endemic countries strengthen their malaria control activities. Their work includes policy development, program guidance and support, laboratory and applied field research, and monitoring and evaluation. CDC malaria programs are implemented bilaterally, in partnership with other multilateral organizations, and as part of the coordinated U.S. strategy--the Lantos Hyde U.S. Government Malaria Control Strategy--for implementing the President's Malaria Initiative. CDC combats malaria bilaterally with foreign Ministries of Health through international initiatives such as Roll Back Malaria (RBM), and with multilateral partners, such as the World Health Organization (WHO), the United Nations Children's Fund (UNICEF), the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund) and the World Bank. Through its multilateral partnerships, CDC has staff posted at WHO. CDC's global malaria efforts focus on utilizing data and applying research to develop evidence-based strategies for malaria prevention and control, and monitoring and evaluating existing malaria control programs. Specific activities include designing and implementing technical and programmatic strategies, which include training, supervision, laboratory, communications, monitoring and evaluation, and surveillance systems; developing plans to estimate the impact of malaria control and prevention efforts; evaluating impact of long-lasting insecticide-treated nets (LLINs) and monitoring the spread of insecticide resistance; improving surveillance with the use of hand-held computers equipped with global positioning systems to conduct household surveys in remote villages; evaluating the performance of health workers; and improving the delivery of quality diagnosis and treatment services for malaria and monitoring anti-malarial therapeutic efficacy. From FY2001 to FY2011, CDC has provided roughly $111.7 million on global malaria programs. These funds have been used to provide 19 million insecticide-treated nets, 3.5 million treatments to prevent the transmission of malaria from mother to child, and 40 million anti-malarial treatment doses. In addition to appropriations CDC receives for global malaria efforts, USAID transfers funds to CDC as an implementing partner of the President's Malaria Initiative. In June 2005, President Bush proposed the initiative and asserted that with $1.2 billion spent between FY2006 and FY2010, PMI would seek to halve malaria deaths in 15 target countries in Africa. PMI is led by USAID and jointly implemented by CDC and USAID. According to USAID, an evaluation of the first five years of PMI will be conducted between 2011 and mid-2012. USAID reports, however, that child mortality rates have declined in PMI-focus countries and that malaria interventions have contributed to this phenomenon. From FY2006 through FY2008, USAID transferred an estimated $25 million to CDC for global malaria programs. In FY2009, USAID transferred $15 million to CDC, of which some $13 million was for PMI and nearly $2 million for malaria efforts in the Greater Mekong sub-region. Information is not yet available on transfers for FY2010 and FY2011. Established in 2004, CDC's Global Disease Detection (GDD) program develops and strengthens global public health capacity to rapidly identify and contain disease threats from around the world. The GDD program draws upon existing international expertise across CDC programs to strengthen and support public health surveillance, training, and laboratory methods; build in-country capacity; and enhance rapid response capacity for emerging infectious diseases. By the end of FY2010, CDC had established eight GDD centers, which work to build broad-based public health capacity in host-countries and within the region in support of the International Health Regulations (IHR). These centers were located in China, Egypt, Guatemala, India, Kazakhstan, Kenya, South Africa, and Thailand. In 2011, due to budget reductions, CDC reduced capacity in the Kazakhstan center, and the center no longer serves as a GDD regional center. As such, CDC now manages seven GDD regional centers. The regional centers work to develop six core capacities: (1) emerging infectious disease detection and response, (2) training in field epidemiology and laboratory methods, (3) pandemic influenza preparedness and response, (4) zoonotic disease detection and response at the animal-human interface, (5) emergency preparedness and risk communication, and (6) laboratory systems strengthening. Since 2006, the regional centers assisted in 665 outbreak investigations and other public health emergencies, including typhoid fever; influenza H5N1, H5N2, and H3N2; Congo-Crimean hemorrhagic fever; anthrax; dengue; and Rift Valley fever. From FY2001 to FY2011, CDC spent about $248.6 million on GDD activities worldwide. This figure includes funding for International Emergency and Refugee Health efforts. In FY2012, CDC requested that Congress provide $35.8 million to fund several programs aimed at building public health capacity among recipient country leaders, particularly health ministries, through the budget line entitled "Global Public Health Capacity Development." These activities include the Field Epidemiology (and Laboratory) Training Program [FE(L)TP]; the Sustainable Management Development Program (SMDP); Global Safe Water Sanitation and Hygiene; Maternal and Child Health; Afghanistan Health Initiative; and Health Diplomacy Initiative. Until FY2012, this budget category was called "Other Global Health," and it was used primarily to fund the FELTP and SMDP programs. The FY2012 budget proposes that the other four programs, currently funded through other CDC and HHS offices, be funded through the new Global Public Health Capacity Development program. This section focuses on FELTP and SMDP, the two programs Congress authorized the Center for Global Health to support. Additional information on the other programs can be found in the FY2012 congressional budget justification. FE(L)TP, established in 1980, is a full-time, two-year postgraduate applied public health training program for public health leaders to help strengthen health systems, train health professionals, build capacity to assess disease surveillance, and improve health interventions. The program is modeled after CDC's Epidemic Intelligence Service and is adapted to meet local needs. Participants spend about 25% of their time in the classroom and 75% in field placements, providing public health services to host countries' health ministries. CDC develops the FE(L)TP in conjunction with local health leaders to ensure sustainability and ultimately hand-off the trainings to local officials (typically after four to six years). From 1980 to 2010, CDC has consulted with and supported 41 FE(L)TPs and similar programs in 57 countries. As of March 2011, CDC is supported 18 programs covering 34 countries. In 2010, CDC supported 335 trainees in the FE(L)TPs. These trainees conducted 148 outbreak investigations, 47 planned investigations, and 188 surveillance studies. The Sustainable Management Development Program, established in 1992, also aims to strengthen public health systems by bolstering leadership and management capacity of health workers. SMDP helps countries improve program operations and advance the science base through applied research and evaluation. With partners, SMDP provides technical assistance to programs that are helping to prevent mother-to-child transmission of HIV/AIDS, reduce the transmission of tuberculosis, and improve management of district public health programs that prevent and control diseases. CDC also partners with other groups to analyze the quality of organizational leadership, assess management skills, and identify performance gaps in health systems. Through the program, CDC helps health leaders to create action plans for capacity development that includes a budget, a timeline, and measurable outcomes. After concluding the program, CDC provides post-course technical assistance to support the development of sustainable management development programs and post-training incentives to stimulate lifelong learning. These incentives include website access, regional networking among alumni, conferences, fellowships, and career development opportunities (e.g., laboratory systems), and improve practices to reduce natural or manmade infections that could eventually affect U.S. citizens. From 1992 to 2010, 414 faculty from over 60 countries graduated from SMDP's Management for Improved Public Health (MIPH) course, which builds the capacity of ministries of health and educational institutions by focusing on the skills of planning, priority setting, problem solving, budgeting, and supervision. In addition, 42 participants from 15 countries attended SMDP's inaugural Global Health Leadership Forum in 2010, which focused on helping senior leaders from developing countries create a comprehensive vision and project plan for strengthening their country's health system. From FY2001 to FY2011, CDC spent approximately $49 million on these programs. CDC's activities related to improving global health outcomes expand beyond those funded through the Center for Global Health. CDC also leverages other resources to respond to global requests for technical assistance related to disease outbreak response; prevention and control of injuries and chronic diseases; emergency assistance and disaster response; environmental health; reproductive health; and safe water, hygiene, and sanitation. Specifically, CDC supports global health programs aimed at TB, influenza, and neglected tropical diseases. The section below highlights those activities. CDC collaborates with U.S. and multilateral partners to provide technical support in the global effort to eliminate TB. Bilateral partners include the National Institutes of Health (NIH) and USAID; multilateral partners include the Global Fund, the International Union Against TB and Lung Disease, and WHO. Key activities in CDC's bilateral TB interventions include research (including operations research, research to improve treatment, and epidemiological research); improvement of TB screening and diagnostics; surveillance of TB/HIV prevalence and multi-drug resistant TB (MDR-TB) prevalence; laboratory strengthening; infection control; program evaluation; outbreak investigation control; and subjective matter expertise for policy development. CDC also provides technical assistance to multilateral efforts to contain TB, including the Directly Observed Therapy Short Course (DOTS) program, the Global Stop TB Strategy, and the Green Light Committee Initiative, which helps countries access high-quality second-line anti-TB drugs for those infected with MDR-TB and extensively drug resistant TB (XDR-TB). The agency also partners with WHO to conduct surveillance of drug-resistant TB worldwide. CDC works in over 40 countries around the world to prevent, control, and respond to influenza outbreaks in general, and help high-risk countries develop rapid response in particular. The agency also serves as one of four WHO Collaborating Centers for Influenza. Its responsibilities in this capacity include support of the Global Influenza Surveillance Network. During the 2009 H1N1 influenza pandemic, for example, CDC shipped 2,100 test kits (each able to perform 1,000 test reactions) to 545 laboratories in 150 countries at no cost to the countries, and sent experts to the field to help strengthen laboratory capacity and train health experts to control the spread of the 2009 H1N1 influenza virus. Global influenza operations are implemented bilaterally with countries and in cooperation with groups such as DOD and WHO. Additional related activities include building laboratory capacity of foreign governments for the prompt detection of novel influenza viruses; strengthening epidemiology and influenza surveillance; enhancing laboratory safety; developing and training rapid response teams; and supporting the establishment of influenza treatment and vaccine stockpiles. In FY2005, Congress provided emergency supplemental funds for U.S. efforts related to global pandemic influenza preparedness and response. In each fiscal year since, Congress has funded U.S. efforts to train health workers in foreign countries to prepare for and respond to a pandemic that might occur from any influenza virus, which have included support for CDC's influenza-related activities, though past appropriation measures have not specified how much of those funds CDC should spend on global efforts. For more than two decades, CDC has worked to reduce the illness, disability, and death caused by neglected tropical diseases. CDC partners with other U.S. agencies to implement the NTD Program. In that capacity, CDC helps to develop global policy and guidelines for NTD control programs; conduct research to improve existing diagnostic and other tools needed to monitor programs; monitor and evaluate progress toward control/elimination of NTDs; provide technical assistance to countries and other partners to build capacity and improve programs; and study additional NTDs to identify and develop better tools and approaches to control and eliminate them. Much of CDC's current work focuses on the seven NTDs--lymphatic filariasis (LF), onchocerciasis, schistosomiasis, infections from soil-transmitted helminths (hookworm, Ascaris, whipworm), and trachoma--that can be controlled or eliminated through mass drug administration. From FY2001 to FY2011, Congress provided CDC roughly $3.5 billion for global health activities. Over that decade, CDC increased the size and scope of its global health programs. In FY2001, for example, CDC spent $224.1 million on three key global health programs (HIV/AIDS, immunizations, and malaria), with nearly half of those funds aimed at HIV/AIDS programs ( Figure 2 ). By FY2011, CDC's global health budget had grown by nearly 50%, having reached $330.1 million, and had come to support two additional health areas: Global Disease Detection and health system strengthening through "Other Health Programs." In the early 2000s, concerns about HIV/AIDS dominated discussions about U.S. global health engagement and prompted the development of several initiatives, including the LIFE Initiative (Clinton Administration), International Mother and Child HIV Prevention Initiative (Bush Administration), and the President's Emergency Plan for AIDS Relief (Bush Administration). Through these efforts, Congress provided substantial increases for tackling HIV/AIDS through ongoing U.S. bilateral efforts, coordinated government-wide programs (like PEPFAR), and multilateral initiatives like the Global Fund to Fight AIDS, Tuberculosis and Malaria. The bulk of the increases, however, were provided through the State Department-coordinated PEPFAR. By 2004, global infectious disease outbreaks prompted greater congressional support for programs that would bolster countries' capacity to respond to infectious disease outbreaks. In that year, Congress began funding GDD and "Other Health Programs." The growth in spending on such programs meant that HIV/AIDS ultimately became a smaller portion of CDC's global health budget ( Figure 2 ). According to the FY2011 operating plan of CDC, Congress made available $340.2 million for CDC's global health programs. The Administration requests that Congress provide about $381.2 million for CDC's global health programs in FY2012, some 10% more than FY2010 ( Table 1 ). The FY2012 budget request included several programmatic changes. First, CDC began requesting support for programs aimed at addressing parasitic diseases (like neglected tropical diseases) along with requests for global malaria programs. In the FY2011 operating plan, CDC followed this new budgetary structure to report on FY2010 and FY2011 funding levels for activities related to malaria and parasitic diseases. For comparability, malaria is a subset of the parasitic diseases and malaria budget category in Table 1 . The FY2012 budget request also renamed the "Other Global Health" program as the "Global Public Health Capacity Development" program. The Administration requests that this new program combine support for ongoing efforts related to FELTP and SMDP with activities related to water and sanitation, and maternal and child health. The agency also requests that two activities currently funded through the HHS Office of Global Health Affairs--the Afghan Health Initiative and Health Diplomacy--be funded through this new budgetary category.

A number of U.S. agencies and departments implement U.S. government global health efforts. Overall, U.S. global health assistance is not always coordinated. Exceptions to this include U.S. international responses to key infectious diseases; for example, U.S. programs to address HIV/AIDS through the President's Emergency Plan for AIDS Relief (PEPFAR), malaria through the President's Malaria Initiative (PMI), and neglected tropical diseases through the Neglected Tropical Diseases (NTD) Program. Although several U.S. agencies and departments implement global health programs, this report focuses on funding for global health programs conducted by the U.S. Centers for Disease Control and Prevention (CDC), a key recipient of U.S. global health funding. Congress appropriates funds to CDC for its global health efforts through five main budget lines: Global HIV/AIDS, Global Immunization, Global Disease Detection, Malaria, and Other Global Health. Although Congress provides funds for some of CDC's global health efforts through the above-mentioned budget lines, CDC does not, in practice, treat its domestic and global programs separately. Instead, the same experts are mostly used in domestic and global responses to health issues. As such, CDC often leverages its resources in response to global requests for technical assistance in a number of areas that also have domestic components, such as outbreak response; prevention and control of injuries and chronic diseases; emergency assistance and disaster response; environmental health; reproductive health; and safe water, hygiene, and sanitation. CDC also partners in programs for which it does not have specific appropriations, such as efforts to address international tuberculosis (TB) and respond to pandemic influenza globally. Congress does, however, appropriate funds to CDC to address these diseases domestically. In addition, the State Department and the U.S. Agency for International Development (USAID) transfer funds to CDC for its role as an implementing partner in U.S. coordinated initiatives, including PEPFAR, PMI, and the NTD Program. From FY2001 to FY2011, Congress provided CDC roughly $3.5 billion for global health activities, including $330.2 million in FY2011. The President requested that in FY2012, Congress appropriate $358.6 million to CDC for global health programs--an estimated 5% increase over FY2010-enacted levels. There is a growing consensus that U.S. global health assistance needs to become more efficient and effective. There is some debate, however, on the best strategies. This report explains the role CDC plays in U.S. global health assistance, highlights how much the agency has spent on global health efforts from FY2001 to FY2011, and discusses the FY2012 budget proposal for CDC's global health programs. For more information on U.S. global health funding more broadly, see CRS Report R41851, U.S. Global Health Assistance: Background and Issues for the 112th Congress.

House Judiciary Committee Chairman Goodlatte introduced H.R. 3713 , the Sentencing Reform Act of 2015, for himself, ranking Judiciary Committee Member Representative Conyers, and a number of others on October 8, 2015. The proposal addresses four issues: the so-called safety valve that permits courts to disregard otherwise applicable mandatory minimum sentencing requirements in certain drug cases; the mandatory minimum sentencing requirements in such cases; the mandatory minimum sentencing requirements in firearms cases; and the retroactive application of the Fair Sentencing Act. The bill's Senate counterpart, S. 2123 , features many of the same provisions, often in identical language. The so-called safety valve provision of 18 U.S.C. 3553(f) allows a court to sentence qualified defendants below the statutory mandatory minimum in controlled substance trafficking and possession cases. To qualify, a defendant may not have used violence in the course of the offense. He must not have played a managerial role in the offense if it involved group participation. The offense must not have resulted in a death or serious bodily injury. The defendant must make full disclosure of his involvement in the offense, providing the government with all the information and evidence at his disposal. Finally, the defendant must have an almost spotless criminal record. Any past conviction that resulted in a sentence of more than 60 days, that is, a sentence meriting the assignment of more than 1 criminal history point, is disqualifying. Criminal history points are a feature of the U.S. Sentencing Commission's Sentencing Guidelines. The Guidelines assign points based on the sentences imposed for prior state and federal convictions. For example, the Guidelines assign 1 point for any past conviction that resulted in a sentence of less than 60 days incarceration; 2 points for any conviction that resulted in a sentence of incarceration for 60 days or more; and 3 points for any conviction that resulted in a sentence of incarceration of more than a year and a month. The Sentencing Commission's report on mandatory minimum sentences suggested that Congress consider expanding safety valve eligibility to defendants with 2 or possibly 3 criminal history points. The report indicated that under the Guidelines a defendant's criminal record "can have a disproportionate and excessively severe cumulative sentencing impact on certain drug offenders." The commission explained that the Guidelines are construed to ensure that the sentence they recommend in a given case calls for a term of imprisonment that is not less than an applicable mandatory minimum. In addition, the drug offenses have escalated mandatory minimums for repeat offenders. Moreover, similarly situated drug offenders may be treated differently, because the states punish simple drug possession differently and prosecutors decide when to press recidivism qualifications differently. H.R. 3713 would change the safety valve in two ways. First, a defendant would be safety valve eligible with 4 or fewer criminal history points if he had not been convicted previously of a 2-point drug trafficking or violent crime (one that resulted in a sentence of 60 days or more), or any 3-point offense (one for which he was incarcerated for more than 13 months). Second, the proposal would permit the court to waive the criminal history disqualification, in cases other than those involving a past serious drug felony or serious violent felony conviction, if it concluded that the defendant's criminal history score overstated the seriousness of his criminal record or the likelihood that he would commit other offenses. The Controlled Substances Act and the Controlled Substances Import and Export Act establish a series of mandatory minimum sentences for violations of their prohibitions. Class A offenses involve trafficking--that is, importing, exporting, or manufacturing, growing, possessing with the intent to distribute--a very substantial amount of various highly addictive substances, such as more than 10 grams of LSD. Class A offenses carry a sentence of imprisonment for not less than 10 years or more than life. Class B offenses involve substantial but lesser amounts, such as 1 gram of LSD. Class B offenses carry a sentence of imprisonment for not less than 5 years or more than life, and imprisonment for not less than 10 years or more than life in the case of a subsequent conviction. Penalties for both sets of offenses increase if the crime results in a death or if the defendant has a prior conviction for a drug felony. H.R. 3713 would create a mini-safety valve to reduce the mandatory minimum for Class A offenses to imprisonment for not less than 5 years, unless the offender had used violence in the commission of the offense; had acted as a supervisor, leader, supplier, or importer for a drug undertaking; sold to minors; failed to fully reveal all the information or evidence at his disposal relating to the offense or related offenses; or had prior serious drug or violent felony convictions. H.R. 3713 would both expand and contract the recidivist mandatory minimums. Under existing law, any prior drug felony conviction triggers the enhanced recidivist mandatory minimum. Under H.R. 3713 , only drug convictions carrying a maximum penalty of 10 years or more and resulting in a sentence of a year or more would trigger the increased recidivist mandatory minimums. On the other hand, convictions for kidnapping, burglary, arson or other serious violent crimes would also serve as a basis for the recidivist mandatory minimums. In addition, it would reduce the mandatory minimums for Class A recidivists. A defendant with a single qualifying prior offense would face a mandatory minimum of not less than 10 years rather than one of not less than 15 years. The defendant with two or more prior qualifying offenses could expect a mandatory minimum of not less than 25 years instead of a mandatory life sentence. The bill would allow the courts, on their own motion or that of the defendant or the Bureau of Prisons, to resentence defendants, convicted prior to H.R. 3713 's enactment, as though the bill's reduced recidivist mandatory minimums were in place at the time of prior sentencing. In doing so, the courts would be compelled to consider: the nature and seriousness of the risks to an individual or the community; the defendant's conduct following his initial sentencing; and the statutory sentencing factors that they must ordinarily weigh before imposing punishment. H.R. 3713 would insist on a sentence of imprisonment for not more than 5 years to be added to, and to be served after, any sentence imposed for the drug trafficking, exporting, or importing offenses, when fentanyl, a chemical used to "cut" heroin, is involved. There are two firearms-related offenses that call for the imposition of a mandatory minimum sentence of imprisonment. One, the so-called three strikes provision, also known as the Armed Career Criminal Act (ACCA), imposes a 15-year mandatory minimum sentence on an offender convicted of unlawful possession of a firearm who has three prior convictions for a drug offense or a violent felony. The other, 18 U.S.C. 924(c), imposes one of a series of mandatory terms of imprisonment upon a defendant convicted of the use of a firearm during the course of a drug offense or a crime of violence. The ACCA limits qualifying state and federal drug offenses to those punishable by imprisonment for more than 10 years. The qualifying federal and state violent felonies are burglary, arson, extortion, the use of explosives, and any other felony that either has the use or threat of physical force as an element. H.R. 3713 would reduce the mandatory minimum penalty from 15 years to 10 years. It also would make the modification retroactively applicable in the same manner as the proposed mandatory minimum reductions in the case of controlled substances. That is, H.R. 3713 would permit federal courts to reduce the terms of imprisonment of defendants previously sentenced, after considering the defendant's conduct after his initial sentence, "the nature and seriousness of the danger to any person or the community," and the generally applicable sentencing factors of 18 U.S.C. 3553(a). H.R. 3713 's retroactivity would apply to defendants without a prior drug offenses but not to those with serious violent felony convictions. Section 924(c) brings firearm mandatory minimum tack-on status to any federal drug felony and to any other federal felony, that by its nature involves a substantial risk of the use of physical force or that features the use of physical force or threat of physical force as an element. The ACCA calls for a single 15-year mandatory minimum. Section 924(c), in contrast, imposes one of several different minimum sentences when a firearm is used or possessed in furtherance of another federal crime of violence or of drug trafficking. The mandatory minimums, imposed in addition to the sentence imposed for the underlying crime of violence or drug trafficking, vary depending upon the circumstances: imprisonment for not less than 5 years, unless one of the higher mandatory minimums below applies; imprisonment for not less than 7 years, if a firearm is brandished; imprisonment for not less than 10 years, if a firearm is discharged; imprisonment for not less than 10 years, if a firearm is a short-barreled rifle or shotgun or is a semi-automatic weapon; imprisonment for not less than 15 years, if the offense involves armor-piercing ammunition; imprisonment for not less than 25 years, if the offender has a prior conviction for violation of 18 U.S.C. 924(c); imprisonment for not less than 30 years, if the firearm is a machine gun or destructive device or is equipped with a silencer; and imprisonment for life, if the offender has a prior conviction for violation of 18 U.S.C. 924(c) and if the firearm is a machine gun or destructive device or is equipped with a silencer. Section 924(c)'s repeat offender provision is somewhat distinctive. Most recidivist statutes assess a more severe penalty if the defendant commits a second offense after proceedings for the first have become final. Section 924(c) assesses successively more severe penalties for each count within the same prosecution. Under this stacking of counts, a defendant convicted of several counts arising out of a single crime spree involving the robbery of several convenience stores, for example, may face a mandatory term of imprisonment of well over 100 years. H.R. 3713 would make clear that a conviction must have become final before it could be counted for purposes of enhancing the mandatory minimum. H.R. 3713 also would reduce the repeat offender mandatory minimum assessment from imprisonment for not less than 25 years to not less than 15 years. The assessment however, would encompass recidivists with prior equivalent state convictions as well. Except for defendants with prior serious violent felony convictions, H.R. 3713 it would permit courts to apply its amendments to 18 U.S.C. 924(c) retroactively, provided they took into account the defendant's post-conviction conduct, the nature and seriousness of threats to individual or community safety, and the generally applicable sentencing factors. H.R. 3713 contains a third firearms amendment that, although not a strict mandatory minimum amendment, would increase the likelihood of imprisonment by operation of implementing sentencing guidelines by simply increasing the maximum sentence authorized for the offense or offenses. More precisely, it would increase from imprisonment for not more than 10 years to not more than 15 years the sentences for the following firearms offenses: false statements in connection with the purchase of a firearm or ammunition; sale of a firearm or ammunition to, or possession by, a convicted felon or other disqualified individual; while in the employ of a disqualified individual, receipt or possession of a firearm or ammunition; knowing transportation of stolen firearms or ammunition; knowing sale, possession, or pledge as security of stolen firearms or ammunition; or transfer or possession of a machine gun under certain circumstances. Originally, the Controlled Substances Act made no distinction between powder cocaine and crack cocaine (cocaine base). The 1986 Anti-Drug Abuse Act introduced a 100-1 sentencing ratio between the two, so that trafficking in 50 grams of crack cocaine carried the same penalties as trafficking in 5,000 grams of powder cocaine. The 2010 Fair Sentencing Act (FSA) replaced the 5,000 to 50 ratio with the present 500-28 ratio, so that trafficking in 280 grams of crack cocaine carries the same penalties as 5,000 grams of powder cocaine. The Sentencing Commission subsequently adjusted the Sentencing Guidelines to reflect the change and made the modification retroactively applicable at the discretion of the sentencing court. The FSA reductions apply to cocaine offenses committed thereafter. They also apply to offenses committed beforehand when sentencing occurred after the time of enactment. Federal courts have discretion to reduce a sentence imposed under a Sentencing Guideline that was subsequently substantially reduced. The FSA, however, does not apply to sentences imposed prior to its enactment, and it does not apply in sentence reduction hearings triggered by new Sentencing Guidelines. In such proceedings, the courts remain bound by the mandatory minimums in effect prior to enactment of the FSA, so in some instances they may not reduce a previously imposed sentence to the full extent recommended by the FSA-adjusted Sentencing Guidelines. H.R. 3713 would change that. It would allow a court to reduce a sentence that was imposed for an offense committed prior to the FSA, to reflect the FSA amendments, unless the court had already done so or unless the original sentence was imposed consistent with the FSA amendments.

H.R. 3713, the Sentencing Reform Act of 2015, addresses the sentences that may be imposed in various drug and firearms cases. It proposes amendments to those areas of federal law that govern mandatory minimum sentencing requirements for drug and firearm offenses; the so-called safety valves which permits court to impose sentences below otherwise required mandatory minimums in the case of certain low-level drug offenders; and the retroactive application of the Fair Sentencing Act. Related reports include CRS Report R44246, Sentencing Reform: Comparison of Selected Proposals, by [author name scrubbed] and [author name scrubbed].

The Multinational Species Conservation Fund (MSCF; 16 U.S.C. SS4246) supports international conservation efforts benefitting several species of animals. The MSCF has five sub-funds, which provide grants for activities to conserve tigers, rhinoceroses, Asian and African elephants, marine turtles, and great apes (gorillas, chimpanzees, bonobos, orangutans, and various species of gibbons). Each of the funds receives appropriations from Congress through the U.S. Fish and Wildlife Service (FWS). This support is often in conjunction with efforts under the Convention on International Trade in Endangered Species (CITES) and local efforts in the countries in which these animals reside. MSCF provides funding in the form of technical and cost-sharing grants to groups conducting conservation activities in the species' home range countries. The grants address habitat conservation, improve law enforcement, and provide technical assistance for conserving the specified species. The conservation efforts funded by the MSCF funds also benefit from funding and in-kind support provided by partners and collaborators. Congress and constituents have shown interest in conserving iconic endangered species in foreign countries, such as elephants and tigers. Congress has appropriated funds to address wildlife trafficking and to conserve foreign endangered species and their habitats, and it is considering other forms of funding to augment this support. One form of existing support is funds generated through semipostal stamps, which are first-class stamps that are sold with a surcharge over their postage value. The additional charge is recognized by the stamp purchaser as a voluntary contribution to a designated cause (for more information, see " Overview of Semipostal Stamps ," below). To boost funds for conservation programs under MSCF, Congress authorized the creation and distribution of the Multinational Species Conservation Funds Semipostal Stamp (MSCF stamp) under the Multinational Species Conservation Funds Semipostal Stamp Act of 2010 ( P.L. 111-241 ). This law requires the U.S. Postal Service (USPS) to issue and sell the MSCF stamp. A portion of the proceeds (11 cents, less USPS's administrative costs) from the stamp are transferred to the U.S. Fish and Wildlife Service (FWS), which equally distributes the stamp-generated funds among the five MSCF sub-funds (see Figure 1 ). The other portion of the revenue goes to the Postal Service Fund, which is a revolving fund in the U.S. Treasury that consists largely of revenues generated from the sale of postal products and services. USPS introduced the MSCF stamp, entitled "Save Vanishing Species," in September 2011. The stamp depicts an Amur tiger, a design approved by the Postmaster General, who has the final authority to decide the design for semipostal stamps. Congress initially provided for the MSCF stamp to be available to the public for at least two years. Congress extended the mandated sale of the MSCF stamp by an additional four years through the Multinational Species Conservation Funds Semipostal Stamp Reauthorization Act of 2013 ( P.L. 113-165 ). Authorization for the MSCF stamp is set to expire in September 2017. This expiration does not preclude USPS from continuing to issue and sell the stamp, should it choose to do so. As of November 2016, more than 36.6 million MSCF stamps had sold, generating more than $3.9 million for conservation. According to FWS, funds from the stamps have supported 84 conservation projects in 33 countries. Projects and programs funded by stamp sales address antipoaching activities, capacity building for conserving species, community engagement and outreach, habitat restoration, and activities to raise public awareness of the illegal wildlife trade, among other things. In addition, federal grants from MSCF receive matching funds from nonfederal conservation supporters. FWS has noted that the funds from stamp sales have leveraged more than double their value in funds for conservation. For example, from FY2012 to FY2016, $3.1 million of funds generated from stamps leveraged $12.5 million in additional funds from nonfederal stakeholders for conservation projects. The MSCF stamp's efficacy in generating funds for international conservation made reauthorizing the stamp a priority for addressing wildlife trafficking, as the Presidential Taskforce on Wildlife Trafficking created by the Obama Administration in 2014 noted. Funds generated by MSCF stamp sales have supported efforts to decrease wildlife trafficking. For example, FWS used MSCF stamp funds to support a program that rehabilitates trafficked tigers for return to the wild in Indonesia. Semipostal stamps are first-class letter stamps that are sold with a surcharge over their postage value. The additional charge is recognized by the stamp purchaser as a voluntary contribution to a designated cause. For example, a first-class stamp may be purchased for 49 cents, but a first-class semipostal stamp costs 60 cents. USPS sells a semipostal stamp and then transfers a portion of the proceeds (less USPS's administrative costs) to the U.S. Treasury, which allocates funding to the federal agency designated to administer the funds. The agency then expends or distributes the funds for the statutorily designated purpose. Congress first authorized the issuance of semipostal stamps in 1997. The first semipostal stamp sold in the United States was the Breast Cancer Research stamp in 1997, which was created by the Stamp Out Breast Cancer Act ( P.L. 105-41 ). This act authorized the USPS to issue a first-class stamp at a price up to 25% higher than the standard first-class stamp price. The law required USPS to deliver 70% of the additional proceeds to the National Institutes of Health and 30% to the Department of Defense to fund breast cancer research, less USPS's administrative costs. After the success of the Breast Cancer Research stamp, Congress enacted the Semipostal Authorization Act ( P.L. 106-253 ) in 2000. The act gave USPS broad authority to issue and sell semipostal stamps for causes that USPS considers to be in the "national public interest and appropriate." The law specified that funds raised must go only to federal agencies supporting the cause, and it gave discretion to USPS for the selection and depiction of future semipostal stamps. The authority for USPS to issue semipostal stamps expires 10 years after the issuance of the first stamp. This 10-year sunset provision has not started, because USPS has not issued any semipostal stamps through its own authority. All current semipostal stamps have been mandated separately in enacted legislation. However, USPS recently revised its semipostal regulations (39 C.F.R. 551) and has begun the process of developing and issuing its first discretionary semipostal stamp. Recent changes to the USPS semipostal program could affect the MSCF stamp. In 2016, the USPS amended its regulations and began the process of developing and issuing its own semipostal stamps. The Semipostal Authorization Act of 2000 ( P.L. 106-253 ) provided USPS with authority to issue semipostals for a 10-year period beginning on the date on which semipostals are first made available to the public. Under the original regulations implementing the Semipostal Stamp Program, USPS stated that it would not exercise its authority to issue semipostal stamps under 39 U.S.C. SS416 until after the sales period of the Breast Cancer Research Stamp is concluded. A rule issued by USPS in April 2016 retracts the restriction on the start of the discretionary Semipostal Stamp Program. The amended regulations state that USPS will issue one discretionary semipostal stamp at a time, five in total, to be sold for a period of no more than two years each. Public proposals for the first discretionary semipostal were due in July 2016. The final decision regarding the subject of the discretionary semipostal stamps belongs to the Postmaster General; as of February 28, 2017, a decision on what semipostals to issue had not been made. If the MSCF stamp is not reauthorized in 2017, USPS could discontinue the MSCF stamp and focus on other semipostal stamps per its plan in the amended regulations. Several bills introduced in the 115 th Congress address the MSCF stamp and other semipostal stamps. Some bills would reauthorize the issuance of the MSCF stamp for an additional four years (e.g., S. 480 and H.R. 1247 ). Further, H.R. 1247 would require an MSCF semipostal stamp depicting an African elephant in addition to an Amur tiger. Other bills would require USPS to issue semipostal stamps supporting other causes, such as the Peace Corps ( H.R. 332 ), efforts to combat invasive species ( H.R. 1837 ), agricultural conservation programs ( H.R. 581 ), and the families of fallen service members ( H.R. 1147 ). H.R. 128 would take away the general authority of USPS to issue semipostal stamps. Under the bill, USPS could issue semipostals as long as the stamps were mandated by Congress. Overall, many people view semipostal stamps as an easy and inexpensive way to raise both funds from the public and awareness for a given organization or cause. (See Table 1 .) Supporters of the MSCF stamp also contend the following points: Some contend that the MSCF stamp has a great deal of support and leverages additional funds for conservation. They note that funds generated and leveraged by the sale of the stamp have provided a boost to conservation and antipoaching efforts for species targeted by the MSCF. Further, they assert that semipostal stamps have the potential to generate greater amounts of funding, as evidenced by the success of the Breast Cancer Research Stamp. According to some, the MSCF stamp provides the public with an opportunity to participate in financing conservation and anti-wildlife trafficking efforts for MSCF species. Some contend that, apart from raising funds for conservation, MSCF stamps can be used to raise public awareness of wildlife trafficking. In addition, some contend that MSCF stamps created in collaboration with efforts in other countries could increase public awareness about wildlife trafficking and conservation on an international scale. Some potential detracting points associated with the issuance of the MSCF stamp and other semipostal stamps include the following: In the past, USPS expressed limited interest in selling semipostal stamps. During a Senate hearing in 2000, a USPS representative noted that USPS did not favor the issuance of further semipostal stamps after the Breast Cancer Research Stamp. USPS stated that fundraising was a diversion from the service's core mission and that the philatelic community opposed semipostals on the grounds that they dilute the quality of the stamp program. USPS further noted that choosing among the many worthy causes eager for semipostal revenue would be difficult and requested that Congress help make decisions on what semipostal stamps should be created in the future. Given USPS's stated intention in 2016 to issue semipostal stamps under its general authority, the service's position may have changed. Further, if USPS issues more types of semipostal stamps, it is unclear whether the increased competition will decrease sales of the MSCF stamp. Some might suggest that causes other than the MSCF could receive wider attention and therefore should be prioritized over the MSCF for semipostal stamp programs. The success of semipostal stamps varies widely. The Breast Cancer Research Stamp has generated several million dollars a year for its cause, but two other semipostal stamps--the "Heroes of 2001" and "Stop Family Violence" semipostal stamps--generated significantly less funding (see Table 1 ). It is difficult to predict which causes would benefit most from the sale of semipostals. Some might contend that future MSCF stamps may not generate sufficient funds to support their existence. No analysis has clarified the precise factors that affect the sales of any particular semipostal. Factors that could affect the success of semipostal sales, such as the MSCF stamp, may include advertising, competition with other semipostal stamps, and popularity of the cause represented by the semipostal stamp. Some might be concerned that the range of eligible uses for funds generated by MSCF stamp is limited to a small set of species. They might suggest creating specific or alternative guidelines so that the funds raised address broader international conversation efforts.

The Multinational Species Conservation Fund (MSCF) supports international conservation efforts benefitting several species of animals, often in conjunction with efforts under the Convention on International Trade in Endangered Species (CITES). MSCF receives annual appropriations under the U.S. Fish and Wildlife Service (FWS) to fund five grant programs for conserving tigers, rhinoceroses, Asian and African elephants, marine turtles, and great apes (gorillas, chimpanzees, bonobos, orangutans, and various species of gibbons). To provide a convenient way for the public to contribute to these activities and to boost funds for these conservation programs, Congress authorized the Multinational Species Conservation Funds Semipostal Stamp Act of 2010 (P.L. 111-241). With the MSCF semipostal stamp (MSCF stamp) program set to expire in 2017, Congress is considering whether to reauthorize the MSCF stamp through pending legislation (e.g., S. 480 and H.R. 1247). Semipostal stamps are postage stamps that are sold with a surcharge above the normal price for a 1-ounce first-class letter stamp. For example, the current price for a first-class stamp is 49 cents, whereas a first-class semipostal stamp costs 60 cents. The additional charge is recognized by the stamp purchaser as a voluntary contribution to a designated cause. Since 1997, Congress has authorized the U.S. Postal Service (USPS) to sell four different semipostal stamps, including the MSCF stamp. The MSCF stamp, entitled "Save Vanishing Species," was first issued by USPS on September 22, 2011. A portion of the stamp's sale proceeds is transferred to the U.S. Fish and Wildlife Service, which administers the MSCF and provides grants to international organizations to help protect the species listed above. As of November 2016, proceeds from MSCF stamp sales had generated more than $3.9 million for the MSCF. Many view semipostal stamps as an easy and inexpensive way to raise funds and awareness for a given organization or cause. Some contend that the MSCF stamp provides a significant amount of funding for MSCF conservation programs and raises awareness about the conservation of certain international threatened and endangered species. Others argue that semipostal stamps detract from the mission of the USPS and divert consumers away from other stamps the USPS has to offer. Additionally, some contend that other causes could benefit more than the MSCF from a semipostal stamp program.

Indian tribes are unique in that they are quasi-sovereign entities that enjoy all the sovereign rights not divested by treaties or Congress, or inconsistent with their dependent status. As "domestic dependent nations," "Indian tribes are distinct, independent political communities, retaining their original natural rights in matters of local self-government." However, they are subordinate to the sovereignty of the United States. Because of tribes' unique status, courts have wrestled with the issue of whether statutes that do not mention tribes apply to tribes. The National Labor Relations Act (NLRA), which does not mention tribes, gives employees the right to collectively bargain with employers, and imposes on employers the obligation to bargain with employees in good faith. Section 2(2) of the NLRA defines the term "employer" to exclude "the United States or any wholly owned government corporation or any state or political subdivision thereof." In 1976, the National Labor Relations Board (NLRB), the agency responsible for enforcing the NLRA, concluded that tribal employers were "implicitly" exempted from the NLRA as governmental entities. Later, it decided the exemption did not extend to tribal employers located off tribal land. In 2004, the NLRB abandoned the location-based test in favor of a test that presumes the NLRA applies, but allows exceptions if application of the NLRA interferes with a tribe's right of self-governance in intramural matters or treaty rights. Since 2004, the NLRB has been enforcing the NLRA against tribal casinos. The Tribal Labor Sovereignty Act of 2015, H.R. 511 and S. 248 , would amend the NLRA's definition of employer to exclude, "any enterprise or institution owned and operated by an Indian tribe located on its Indian lands" effectively reinstating the Board's position before 2004. The remainder of this report discusses how the NLRB developed its current position on applying the NLRA to tribal casinos, considers how it has applied the NLRA since 2004, and discusses how the Tribal Labor Sovereignty Act of 2015 relates to the history of the NLRB applying the NLRA to tribal enterprises. The NLRB's position on enforcing the NLRA against tribal employers has changed over time. This section explains the reasoning behind the Board's positions. In 1976, the NLRB considered for the first time whether the NLRA applied to tribal employers in Fort Apache Timber Co. In this case, the White Mountain Apache Tribe (Tribe) owned and operated the Fort Apache Timber Co. on its reservation. The Board did not indicate whether the timber company employed non-Indian employees, but mentioned that it participated in interstate commerce. The NLRB identified the question presented as: "whether an Indian tribal governing council qua government, acting to direct the utilization of tribal resources through a tribal commercial enterprise on the tribe's own reservation, is an 'employer' within the meaning of the Act." The NLRB explored the legal status of Indian tribes, focusing on their sovereignty and right of self-government. Although the Board did not find that the tribal timber company was excluded from the definition of "employer" under section 2(2), the Board concluded that it was "implicitly exempt" within the meaning of the NLRA. In a footnote, the NLRB noted that the Supreme Court found that a utility district owned by private individuals was exempt because the utility district was responsible to public figures, making it a political subdivision of a state. Using that reasoning, the NLRB concluded, "the Fort Apache Timber Company is an entity administered by individuals directly responsible to the Tribal Council of the White Mountain Apache Tribe, hence exempt as a governmental entity recognized by the United States, to whose employees the Act was never intended to apply." The Board applied the reasoning of Fort Apache in Southern Indian Health Council to conclude that the employer at issue, which was a consortium of a number of tribes and operated on a reservation, was exempted from the NLRA as a governmental entity because the employer, and its personnel policies, were controlled by the tribes. In 1992, the NLRB considered whether its reasoning in Fort Apache Timber Co. applied to a tribal employer that was located outside the tribe's reservation in Sac and Fox Industries . In this case, the NLRB determined that Fort Apache and Southern Indian Health Council were inapplicable because those cases involved tribal employers located on reservations and application of the NLRA would have interfered with the tribes' "right of internal sovereignty." The NLRB noted that in Fort Apache and Southern Indian Health Council it had found the tribal employers implicitly exempt as governmental entities, but determined that the Fort Apache reasoning was not binding because it applied to tribal employers on land within the tribes' reservations. This case, however, involved a tribal employer located far away from the reservation. Having concluded that Fort Apache was not binding, the NLRB turned to the jurisprudence governing when statutes of general applicability apply to tribes to determine whether the NLRA applied to Sac & Fox Industries. The NLRB first quoted the Supreme Court's opinion in Federal Power Comm'n v. Tuscarora Indian Nation : "it is now well settled by many decisions of this Court that a general statute in terms applying to all persons includes Indians and their property interests." However, the NLRB noted exceptions to this rule, and cited Donovan v. Coeur d'Alene Tribal Farm , a case decided by the U.S. Court of Appeals for the Ninth Circuit. The so-called Coeur d'Alene exceptions provide that a statute of general applicability will not apply to a tribe if (1) the law touches "exclusive rights of self-governance in purely intramural matters;" (2) application of the law to the tribe would abrogate treaty rights; or (3) there is proof in the legislative history or elsewhere that Congress did not intended that the law would apply to tribes. If any of those exceptions apply, Congress must explicitly express its intention that tribes be subject to the statute. Because the NLRB found that the tribal business did not fit any of the exceptions, it concluded the business was subject to the NLRA. The NLRB considered its jurisdiction over off-reservation tribal employers again in Yukon Kuskoksim Health Corp. The employer at issue was like the employer in Southern Indian in that it was a health care organization run by a consortium of tribes. However, it was not located on a reservation. Finding the tribal employer's off-reservation location determinative, the Board found the NLRA applied. The NLRB continued to assert jurisdiction based on whether the tribal employer was located on or off a reservation until 2004, when it decided San Manuel Indian Bingo and Casino . In this case, the NLRB was asked to reject the Fort Apache / Sac and Fox Industries location-based test. In considering whether to do so, the Board noted that as tribal businesses have grown, they have employed increasing numbers of non-Indians and begun to compete with non-tribal employers. It assessed the premises underlying Fort Apache and Sac and Fox Industries and rejected them. Thus, the NLRB overturned Fort Apache , modified Sac and Fox Industries , formulated a new rule for when the NLRA would apply to tribes, which it asserted would accommodate both federal labor policy and federal Indian policy, and applied the NLRA to the tribal casino located on a reservation. In place of the location-based test, the NLRB adopted the Tuscarora / Coeur d'Alene test, which assumes a statute that does not mention tribes applies to tribes unless application of the statute would trigger one of the Coeur d'Alene exceptions. However, the NLRB took an additional analytical step of assessing its "discretionary jurisdiction," by "balanc[ing] the Board's interest in effectuating the policies of the [NLRA] with its desire to accommodate the unique status of Indians in our society and legal culture." This step involved "examin[ing] the specific facts in each case to determine whether the assertion of jurisdiction over Indian tribes will effectuate the purposes of the Act." The NLRB explained that when tribal businesses employ significant numbers of non-Indians, compete with non-tribal businesses, and participate in interstate commerce by catering to non-Indian customers, the "special attributes of tribal sovereignty" are not implicated. Distinguishing a tribal enterprise from a tribal government function, the NLRB wrote that exercising jurisdiction over such tribal enterprises would fulfill its mandate to "protect and foster interstate commerce" and "effectuate the policies of the Act while doing little harm to the Indian tribes' special attributes of sovereignty or statutory schemes designed to protect them." The NLRB explained that application of the NLRA to all tribal activities was not appropriate because at times, when tribes perform governmental functions, they act consistent with their "mantle of uniqueness." Such governmental functions are likely to occur on reservations and likely do not involve non-Indians or interstate commerce. Therefore, when tribes engage in self-government of internal matters, the NLRB wrote, the Board's interest in effectuating the purpose of the NLRA is lesser and the tribal interest in autonomy is greater. The NLRB applied this analytical framework to the San Manuel Indian Bingo and Casino and concluded that application of the NLRA would fulfill its mandate to effectuate the purpose of the NLRA. First, the NLRB determined that none of the Coeur d'Alene exceptions applied. The casino argued that application of the NLRA would interfere with the tribe's self-governance because casino revenue funded the government. However, the NLRB employed a narrow reading of Coeur d'Alene 's self-government exception and wrote that the casino's reasoning would result in the self-government exception swallowing the Tuscarora rule. Accordingly, the NLRB concluded that the NLRA applied to the San Manuel Indian Bingo and Casino. The casino appealed the NLRB's decision to the U.S. Court of Appeals for the D.C. Circuit in San Manuel Indian Bingo and Casino v. NLRB . The court of appeals upheld the NLRB's decision, but used an analysis different from that used by the Board. Despite the fact that the court of appeals upheld the NLRB's decision in San Manuel based on different reasoning, the NLRB has used its reasoning based on the Tuscarora / Coeur d'Alene test from its San Manuel decision in subsequent enforcement actions. This section discusses the arguments the tribes have made against applying the NLRA to their casinos and how the NLRB has analyzed those arguments. In Little River Band , the NLRB enforced the NLRA against a tribal casino owned by the Little River Band of Ottawa Indians (Tribe). The Tribe challenged the Board's jurisdiction by arguing that it exercises "inherent sovereignty" over labor relations on its reservation, that it had exercised that sovereignty in passing a labor ordinance that governed casino workers, and that application of the NLRA would impermissibly interfere with its tribal sovereignty and internal self-governance. The Board rejected the Tribes' argument, applying its reasoning from San Manuel . The Board concluded that the Tribe's labor ordinance did not fall within the Coeur d'Alene exception for self-government in intramural affairs because the labor ordinance was not related to self-governance - it regulated labor at a business that served and employed non-Indians. The U.S. Court of Appeals for the Sixth Circuit affirmed the Board's ruling. The court considered the law governing tribal jurisdiction over non-members, described that jurisdiction as being at the periphery of the tribe's sovereignty, applied the Tuscarora / Coeur d'Alene test, and concluded that regulation of non-Indian labor relations at the casino did not fit within the exception for self-government in intramural affairs. The Saginaw Chippewa Indian Tribe of Michigan (Tribe) challenged the jurisdiction of the NLRB to apply the NLRA to its casino. The Tribe argued that the NLRA did not apply because its treaties guaranteed its right to self-government and its right of exclusive use of the reservation. The right to self-government, the Tribe argued, included the right to operate a casino, and the right to exclude included the right to regulate the conduct of its employees and to exclude federal personnel. The NLRA, it argued under the Tuscarora / Coeur d'Alene test, would infringe its right to self-government and its treaty right to exclusive use of the reservation, and, accordingly, should not apply. The NLRB found that running a casino did not fit within the self-government exception because the casino is a commercial, not governmental, activity and its regulation does not interfere with internal tribal activities because the casino employs non-Indians, competes with non-Indian businesses, and attracts non-Indian customers. The Board cited its opinion in San Manuel for support. Although the Board conceded that the Tribe's treaties set aside the reservation for the Tribe's exclusive use, it wrote that such a "general" treaty right was insufficient to qualify for the treaty right exception. If such a general right were to prohibit the application of federal law, it reasoned, virtually no federal laws would apply to reservations created by treaties. Finally, the Board weighed the policy interests implicated in the case, stating that when the tribe is fulfilling a traditional governmental function, the Board's interest in enforcing the NLRA is weaker than when the tribe is engaging in a commercial venture involving non-Indians. Because the casino is commercial in nature, competes with non-Indian businesses, and services non-Indian customers, the Board found, the "special attributes of the Tribes sovereignty" are not implicated by application of the NLRA. Therefore, the NLRB concluded that policy considerations weigh in favor of applying the NLRA. The U.S. Court of Appeals for the Sixth Circuit upheld the NLRB's enforcement of the NLRA against the casino. However, the panel made clear that but for the Little River Band precedent, it would have applied a different analysis and reached a different result. In this case, the Chickasaw Nation (Tribe) argued that the NLRA should not apply under the Tuscarora / Coeur d'Alene test because it would violate three treaty rights guaranteed by the 1830 Treaty of Dancing Rabbit Creek: the right to self-government, the right to exclude, and, under Article 4, a right to be free of federal laws, except those passed to address Indian affairs. The Board did not address the first two rights. Instead, it focused on Article 4 of the treaty, which provides, among other things, that the Tribe will not be subject to "all laws, except such as from time to time may be enacted in their own National Councils ... and which may have been enacted by Congress, to the extent that Congress under the Constitution are required to exercise a legislation over Indian Affairs." The treaty also provided that ambiguities in the treaty "shall be construed most favorably towards" the Tribe. The Board concluded that Article 4, "forecloses application of the [NLRA], which is not a law enacted by Congress in legislation specific to Indian affairs." Because no party argued that the NLRA was passed under the Indian Commerce Clause or directed at Indian affairs, the Board concluded that enforcement of the NLRA would abrogate a "specific" treaty right guaranteed by Article 4. The Tribe had an 1866 treaty with the United States, which some parties argued abrogated the Article 4 right. Article 7 of this 1866 treaty states that the Tribe agrees, "to such legislation as Congress and the President ... may deem necessary for the better administration of justice and the protection of the rights of persons and property within Indian Territory." However, the NLRB rejected the arguments that Article 7 granted the U.S. broad legislative power over the Tribe and that the NLRA falls within the kind of legislation specified in the treaty. The Board concluded that Article 4 of the 1830 treaty and Article 7 of the 1866 treaty were compatible. Therefore, the Tribe's rights under Article 4 persisted. Furthermore, the Board noted, Article 45 of the 1866 treaty provides "all the rights, privileges and immunities heretofore possessed by [the Tribe] ... or to which they were entitled under the treaties and legislation heretofore made ... shall be, and are hereby declared to be, in full force, so far as they are consistent with the provisions of this treaty." Because the Board read Article 4 of the 1830 treaty and Article 7 of the 1866 treaty to be compatible, it concluded, "asserting jurisdiction [to enforce the NLRA against the casino] would abrogate treaty rights specific to the [Tribe]." Accordingly, it dismissed the complaint. In enforcing the NLRA against tribal casinos, the NLRB seems to follow its analysis from San Manuel , which relies on the Tuscarora / Coeur d'Alene test, and a weighing of the labor policy interests and the Indian policy interests. The tribes fighting application of the NLRA to their casinos have made the following arguments. In Little River Band , the Tribe argued that application of the NLRA would violate its inherent sovereignty and right of self-government. The NLRB and U.S. Court of Appeals for the Sixth Circuit rejected this argument because they viewed the casino as a commercial enterprise, not a governmental activity, which is not intramural in nature because it employs and serves non-Indians. In Soaring Eagle , the Tribe argued that its treaty guaranteed it the right to self-government and the right to exclude, which includes the right to regulate employee conduct. The Board rejected the self-government argument for the same reasons it rejected the argument in Little River Band . It concluded that the right to exclude guaranteed by the treaty was a "general" right that did not qualify for the treaty right exception under Coeur d'Alene . The U.S. Court of Appeals for the Sixth Circuit, bound by the precedent of Little River Band , upheld application of the NLRA to the casino. Finally, in Chickasaw Nation , the tribe argued that its treaty right to self-government, its right to exclude, and its right to be free of federal laws that did not concern Indian affairs exempted its casino from the NLRA. The Board accepted that the "specific" treaty right to be free of federal laws, except those concerning Indian affairs, would be abrogated by application of the NLRA. Accordingly, it concluded the NLRA did not apply. The Tribal Labor Sovereignty Act of 2015, H.R. 511 and S. 248 , would amend the definition of employer to exclude, "any enterprise or institution owned and operated by an Indian tribe located on its Indian lands." It would define "Indian lands" to mean the following: (A) all lands within the limits of any Indian reservation; (B) any land title to which is either held in trust by the United States for the benefit of any Indian tribe or individual subject to restriction by the United States against alienation; and (C) any lands in the State of Oklahoma that are within the boundaries of a former reservation (as defined by the Secretary of the Interior) of a federally recognized Indian tribe. It appears, therefore, under this bill, the NLRA would not apply to tribal enterprises located within reservations, on tribal or individual trust or restricted fee land, or, in Oklahoma, within a tribe's former reservation. In effect, it seems that the bill would reinstate a location-based test similar to the one that the Board overturned in San Manuel .

The National Labor Relations Act (NLRA) provides workers with the right to collectively bargain with employers and requires employers to bargain in good faith. The NLRA excludes from the definition of the term "employer" "the United States or any wholly owned government corporation or any state or political subdivision thereof." The NLRA does not specify whether Indian tribal employers are covered. Prior to 2004, the National Labor Relations Board (NLRB), the agency responsible for enforcing the NLRA, followed a rule that excluded from the NLRA tribal employers located on tribal land, but included tribal employers located off of tribal land. In 2004, in San Manuel Indian Bingo and Casino, the NLRB adopted a new position and held that the NLRA applied to all tribal employers, regardless of their location, unless its application would interfere with treaty rights or quintessentially governmental functions. In San Manuel Indian Bingo and Casino v. NLRB, the U.S. Court of Appeals for the D.C. Circuit upheld the NLRB's application of the NLRA to the tribal casino. In recent years, the NLRB has asserted jurisdiction over a number of tribal casinos, relying on its analysis in San Manuel. In June 2015, in Little River Band of Ottawa Indians v. NLRB, the U.S. Court of Appeals for the Sixth Circuit upheld the NLRB's reasoning and application of the NLRA to a tribal casino, despite the fact that the tribe had adopted its own labor ordinance to regulate tribal labor relations and asserted that application of the NLRA would impair this exercise of its inherent sovereignty. In July 2015, the same court considered whether the NLRA applied to another tribe's casino. Because the panel was bound to follow the precedent of Little River Band, it upheld the NLRB assertion of jurisdiction. However, the panel indicated that it would have applied a different analysis and reached a different result, but for the Little River Band precedent. The Tribal Labor Sovereignty Act of 2015, H.R. 511 and S. 248, would amend the NLRA's definition of employer to exclude "any enterprise or institution owned and operated by an Indian tribe located on its Indian lands." In effect, it appears that the bills would reinstate a location-based test similar to the one used by the NLRB prior to 2004, when it decided San Manuel.

The Bureau of Labor Statistics (BLS) defines the employment-population ratio as the ratio of total civilian employment to the civilian noninstitutional population. Simply put, it is the portion of the adult population (16 years and older) that is employed. The ratio is one of several indicators used to assess labor market strength, and is reported monthly alongside the unemployment rate and other statistics by BLS. It is used primarily as a measure of job holders and to track the pace of job creation, relative to the adult population, over time. Recent estimates show that employment as a percentage of the civilian population has not returned to pre-recessionary levels. In November 2007, the employment-population ratio was 62.9%, indicating that 62.9% of the adult population had a job in that month. This rate fell steadily during the recession and several months beyond, before stabilizing around 58.5% in October 2009. Between October 2009 and March 2014, the ratio fluctuated within 0.3 percentage points of 58.5%. Since then, the employment-population rate has climbed slowly to 59.3%, its value in April 2015. The slow pace of growth in the employment-population ratio in the post-recessionary period is further remarkable because it coincided with a sharply falling unemployment rate. This is interesting because, in recent decades, the employment-population ratio has tracked the unemployment rate closely in the United States, though moving in opposite directions. Based on this pattern, the expectation was that falling unemployment would be met with a rising employment-population ratio; but this has not been the case. The new pattern points to significant changes in the labor force participation rate (i.e., a decline) that counterbalance the effects of a lower unemployment rate on adult employment. This report provides an overview of the employment-population ratio. It opens with a discussion of its value as a labor market indicator, noting its key features and limitations. This is followed by an examination of long-term and recent trends. The contribution of demographic and economic factors to recent patterns is explored at the close of the report. Several features of the employment-population ratio make it an attractive employment indicator for labor market analysis. It is easy to interpret, and can be used to make meaningful comparisons across time and groups with dissimilar population size. Because it takes into account the impacts of both labor force participation and unemployment, it is a useful summary measure when those forces place countervailing pressures on employment. The employment-population ratio has a simple interpretation: it is the share of adults who are employed. As such it provides information about the magnitude of employment (relative to population), and the degree to which an economy is using a key productive resource (labor). This is important to labor market analysis, but has broader economic significance as well (i.e., to national output and growth). That the employment-population ratio gauges employment against population , and not the labor force , is an interpretational advantage over several other labor market indicators, including the unemployment rate. As the U.S. economy recovers from the most recent recession, considerable discussion has centered on the unemployment rate and how its decline should be interpreted. Analysts have debated the extent to which a falling unemployment rate indicates a strengthening labor market, or signals an exodus of discouraged workers from the labor force. Unlike the unemployment rate, which assesses the job status of workers in the labor force, the employment-population ratio places employment in the context of a much broader group of potential workers (i.e., the adult population). This feature provides the employment-population ratio a degree of stability, because movement in and out of the labor force only registers in the numerator of the ratio. When the employment-population ratio rises, it means that a larger percentage of the adult population has a job. By contrast, the unemployment rate can fall without a corresponding rise in employment if unemployed workers leave the labor force. Placing employment in the context of the adult population permits more meaningful comparisons over time and across countries than mere employment levels. Consider, for example, that approximately 136.6 million workers were employed in the United States in February 2000. Fifteen years later, in February 2015, U.S. employment stood at nearly 148.3 million workers. Despite the addition of 11.7 million workers, the employment-population ratio in February 2015 (59.3%) was 5.3 percentage points below the ratio for February 2000 (64.6%), indicating that the adult population grew faster than employment over that period. Similarly, controlling for population facilitates international comparisons, particularly between countries with markedly different population sizes. The employment-population ratio has additional value as a summary measure when the unemployment rate and labor force participation rate send conflicting signals about employment growth. To see this, it helps to look at the employment-population ratio in terms of its principal components: (1) the rate at which the adult population participates in the labor market (i.e., the labor force participation rate), and (2) the proportion of jobseekers who are able to secure employment (i.e., employment rate of the labor force). In other words, the employment-population ratio describes concurrently the proportion of the adult population who want jobs and the success rate of this group in obtaining jobs . This can be seen mathematically through a simple decomposition: That is: Because the labor force is the sum of all employed and unemployed workers (i.e., labor force = employment + unemployment), the expression can be re-written in terms of the unemployment rate: That is: Changes in the employment-population ratio are therefore determined by changes in the labor force participation rate and changes in the unemployment rate (or, equivalently, by changes in the labor force participation rate and the employment rate). All things equal, a rise in the labor force participation rate or a decline in the unemployment rate will increase employment. When they occur together (i.e., a simultaneous rise in labor force participation and drop in the unemployment rate), the employment-population ratio will necessarily increase. This is intuitive, because when a larger share of the population are seeking employment and finding it with greater success, employment will rise. Similarly, a simultaneous decline in labor force participation rate and increase in the unemployment rate will cause the employment-population ratio to fall. The net impact on employment is less clear when the unemployment rate and the labor force participation rate are both rising or both falling . In these cases, the employment-population ratio is a particularly valuable summary measure of these competing forces on employment. Under the both falling scenario, for example, the share of adults looking for jobs decreases (i.e., the labor force participation rate falls) but the portion of jobseekers who successfully find employment increases (i.e., the unemployment rate falls). Under these conditions, the labor force participation rate and employment rate place countervailing pressures on employment. Because it accounts for both factors, the employment-population ratio reports their net impact on employment. This feature of the indicator was particularly useful to labor market assessments following the 2007-2009 recession, when declining unemployment coincided with declining labor force participation. Like all labor market indicators, the employment-population ratio has limits. For one, the employment-population ratio does not provide the full picture of labor market conditions. It does not provide information about hours of work (i.e., whether jobs held are part-time or full-time), wages and benefits, or job quality. On its own, the employment-population ratio cannot be used to assess labor force flows. That is, additional information is needed to determine whether a drop in employment represents more people exiting employment or fewer new entrants. Additional information is also needed to determine whether changes in the employment-population ratio are driven by cyclical factors (i.e., the impacts of economic recession and growth on labor demand) or structural factors (e.g., demographic trends). Figure 1 plots the employment-population ratio from January 1950 to April 2015. In addition to providing a long-term view of the employment-population ratio, the figure illustrates the indicator's cyclical nature. Sharp declines in the ratio coincide with each of the 10 recessions shown in the figure, followed by growth during expansions. Between 1960 and 2000, the employment-population ratio more than recovered from each economic downturn and followed an upward trend. After peaking at 64.7% in April 2000, however, the trend reversed. Although the employment-population ratio continued to rise during periods of expansion, its gains were not sufficient to offset the large declines that occurred during the 2001 and 2007-2009 recessions. Consequences of the new employment-population ratio trend depend importantly on what is driving the change, and whether recent developments are permanent or transitory. Some information about drivers and the permanency of the new trend can be gained from a look at the employment-population ratio's principal components: the unemployment rate and the labor force participation rate. Figure 2 plots the employment-population ratio (blue line, left axis) and the unemployment rate (red line, right axis) from January 1995 to April 2015. It shows that, until recently, movements in the employment-population ratio mirrored those of the unemployment rate, falling with a rising unemployment rate and rising as the unemployment rate falls. The close tracking of the employment-population ratio and unemployment rate can be seen until the beginning of 2010. After that point, the unemployment rate falls steadily, with little movement in the employment-population ratio. These patterns suggest that between 1995 and 2010, the unemployment rate (i.e., the success rate of jobseekers) was the driving factor behind movement in the employment-population ratio. More recently, however, the disconnect between the employment-population ratio and the unemployment rate patterns points to changes in labor force participation. Several factors can affect labor force participation. Demographics such as age and gender have played an important role in the recent decline in the overall labor force participation rate. The ongoing retirement of baby boomers, for example, accounts for some downward pressure on the overall labor force participation rate. Younger workers' decisions to pursue or extend schooling have affected participation rates at the other end of the age spectrum. The rise in married women's labor force participation was a central driving force of the steep rise in labor force participation from 1965 to the late 1980s. By contrast, men's labor force participation has declined steadily since the 1950s, and the pace of decline accelerated during the most recent recession. In January 1950, 86.2% of men participated in the labor market. This rate fell to 77.8% in January 1980 and 71.2% in January 2010. In February 2015, men's labor force participation rate was 69.4%. Labor market conditions also play a part if they increase the number of discouraged workers or other persons marginally attached to the labor force. Demographic and labor force factors can be interrelated; for example, poor labor market opportunities may influence the timing of retirement and choices about educational investment. Trends in the employment-population ratio for "prime-age" individuals--those between 25- to 54-years old--can shed light on the extent to which recent patterns are driven by labor force participation patterns among older and younger workers. The aging population and the tendency for labor force participation rates to slow down for older workers imply a sizable structural decline in overall labor force participation. Despite an increase in their participation rate over the past 20 years, older individuals' (55 years and older) participation rate is more than 40 percentage points below the rate for their prime-age counterparts. At the same time, younger adults (i.e., those in the 16- to 24-year-old-age group)--whose participation rates are relatively low--are delaying entry into the labor market and their participation rates are drifting further downward. See Figure A-1 for additional details on labor force participation trends by age. The employment-population ratio for the prime-age population is interesting in this context because this group is much less likely to be affected by retirement trends and schooling decisions than older and younger age groups. Their labor force participation rates are, however, likely to respond to overall labor market conditions, like labor demand, among other factors. Comparing employment-population ratio trends of the prime-age population to the full adult population (i.e., 16 years and older) can therefore provide some information about whether and to what extent the ratio's slowdown is influenced by economic versus age factors. Figure 3 compares the standard employment-population ratio (for individuals 16 and older) and the employment-population ratio for the prime-age population. There are some similarities in employment-population ratio patterns across the two groups of workers: The employment-population ratios for both prime-age individuals and the full adult population declined sharply during the most recent recession and for a short period thereafter and have been slow to approach their pre-recession values. The trends differ in notable ways as well: Prime-age workers' employment-population ratio fell by 4.9 percentage points--a 6.1% loss--between November 2007 (79.7%) and December 2009 (74.8%), when its decline came to a halt. Over the same period, the employment-population ratio for the full adult population fell by 4.6 percentage points (a 7.3% decline). The employment-population ratio for prime-age workers has made more progress toward recovery. Since reaching its low-point of 74.8% in December 2009, prime-age workers have recouped more than half of the 4.9 percentage point loss in ratio. By contrast, the full adult population has recovered less than a quarter of its 4.6 percentage point loss. In April 2015, the employment-population ratio among prime-age individuals was at nearly 97% of its pre-recession value. For the full adult population it remained at 94% of its pre-recession value. Taken together, these similarities and differences suggest that recent labor force participation patterns of young and older individuals have placed downward pressure on the overall employment-population ratio, but age factors do not fully explain its slow recovery. Trends in the employment-population ratio also reflect labor market differences between men and women. Figure 4 charts the employment-population ratio for prime-age men and women from January 1995 to April 2015. The recent experience of prime-age men and prime-age women--that is, since the onset of the 2007-2009 recession--is particularly interesting. Prior to 2008, prime-age men's and women's employment-population ratios moved more-or-less in concert, although separated by approximately 15 percentage points. During the recent recession and the years thereafter, however, prime-age men's employment-population ratio has been more volatile than that of prime-age women. Although moving in the same general direction, men experienced a greater loss during the recession, and a more pronounced recovery in the years that followed. Additional insights can be gained by unpacking the employment-population ratio into its principal components: the unemployment rate ( Figure 5 ) and labor force participation rate ( Figure 6 ). Although both sexes experienced a sharp rise in unemployment during the most recent recession, the rise was experienced to a much greater degree by prime-age men. At the same time, prime-age men's labor force participation rate, already on a downward trajectory, continued to decline, while prime-age women's labor force participation rate was temporarily elevated and flat. Labor market differences between men and women are likely to be the product of several factors. Among them is the tendency for men to be employed in occupations that experience relatively high job loss during recessions (e.g., production, construction, and material transport jobs). Women's labor participation rates--elevated and flat during the recent recession--may reflect women's labor market entry in response to lost income (i.e., from job loss of another household member), or as suggested by Hotchkiss and Rios-Avila, they may have delayed a planned departure from the labor market until the end of the economic downturn.

The Bureau of Labor Statistics (BLS) defines the employment-population ratio as the ratio of total civilian employment to the civilian noninstitutional population. Simply put, it is the portion of the population that is employed. The ratio is used primarily as a measure of job holders and to track the pace of job creation, relative to the adult population, over time. The employment-population ratio has several properties that make it an attractive indicator for labor market analysis. It is easy to interpret and can be used to make meaningful comparisons across time and groups with dissimilar population size. Because it takes into account both the impacts of labor force participation and unemployment, it is a useful summary measure when those forces place countervailing pressures on employment. Like all labor market indicators, it has limits. For example, it does not distinguish between part-time and full-time employment, and it is silent on wages, benefits, and job conditions. Trends in the employment-population ratio also do not provide information about job flows (i.e., whether a drop in employment represents more people exiting employment or fewer new entrants). Recent estimates show that employment as a percentage of the civilian population has not returned to pre-recessionary levels. In November 2007, the employment-population ratio was 62.9%, indicating that 62.9% of the adult population had a job in that month. This rate fell steadily during the recession and several months beyond, before stabilizing around 58.5% in October 2009. Between October 2009 and March 2014, the ratio fluctuated within 0.3 percentage points of 58.5%. Since then, the employment-population ratio has climbed slowly to 59.3%, its value in April 2015. These patterns should be taken in the context of shifting demographics and other recent developments in the United States. Notably, the large baby boomer cohort has started to retire, and younger individuals are spending more time in school or otherwise delaying labor market entry. A comparison of recent employment-population ratio trends for the "prime-age" population (persons in the 25- to 54-year-age group) with those for the full adult population (persons 16 years and older) suggests that recent labor force participation patterns of young and older workers have placed downward pressure on the employment-population ratio, but age factors do not fully explain its slow recovery.

Since the United States and Vietnam established diplomatic relations in 1995, the two countries have expanded relations and cooperation across a wide range of sectors. As U.S.-Vietnam bilateral economic, military, and diplomatic ties have grown, so has interest in strengthening cooperation in the nuclear energy sphere. A civilian nuclear cooperation agreement was initialed by the two countries in December 2013 and signed in May 2014 under Section 123 of the Atomic Energy Act of 1954 (as amended). Such "123 agreements" are necessary for the export of nuclear reactors and components and can help facilitate the transfer of nuclear energy technology. The U.S.-Vietnam 123 agreement was subject to congressional review. Congress received the agreement with the required supporting documents on May 8, 2014, for review. It may enter into force after the 90 th day of continuous session after its submittal to Congress (a period of 30 plus 60 days of review) unless a joint resolution disapproving the agreement is enacted. The congressional review period for this agreement was completed on September 9, 2014. At least four issues were prominent during the congressional review period: (1) whether the agreement should have included stronger nonproliferation commitments such as a legally binding commitment by Vietnam not to build uranium enrichment and reprocessing facilities; (2) the extent to which Vietnam's human rights record should affect the decision to enter into a nuclear energy agreement; (3) the weight that should be given to the growing strategic relationship between the United States and Vietnam; and (4) the extent to which U.S. companies would benefit from an agreement. Vietnam also has nuclear cooperation agreements with Russia, France, China, South Korea, Japan, and Canada. The U.S. nuclear industry contends that billions of dollars of exports could result from the Vietnam 123 agreement. While it is unclear what, if any, contracts the U.S. nuclear industry would conclude with Vietnam's nuclear energy sector, it is likely that U.S. companies would provide services as part of a reactor supply agreement that Vietnam signed with Japan in 2010. Such services would not necessarily require a U.S. 123 agreement, but transfers might be facilitated if one were in place. The first major step by the United States and Vietnam toward a 123 agreement was the signing of an agreement to strengthen nuclear safety and the nascent nuclear regulatory framework in Vietnam in 2008. Under that agreement, U.S. Nuclear Regulatory Commission experts have been advising the Vietnam Agency for Radiation and Nuclear Safety and Control (VARANS). The U.S. Department of Energy (DOE) and the Nuclear Regulatory Commission (NRC) train Vietnamese officials on nonproliferation and nuclear safety best practices related to power plant operation, and assisted with the drafting of Vietnam's Atomic Energy Law, passed by Vietnam's National Assembly in June 2008. Vietnamese technicians have also attended nonproliferation safeguards training programs at U.S. national laboratories. In March 2010, the United States and Vietnam signed a Memorandum of Understanding Concerning Cooperation in the Civil Nuclear Field that was designed to increase cooperation on nuclear safety and facilitate development of an independent regulatory agency. Then-U.S. Ambassador to Vietnam Michael Michalak said he anticipated the 2010 Memorandum would be a "stepping stone" to a bilateral nuclear energy cooperation (Section 123 agreement). Vietnam's current nuclear infrastructure consists of a research reactor and several research institutes. Under the Atoms for Peace program in the early 1960s, the United States provided South Vietnam with a 250 kilowatt (kw) pool-type TRIGA Mark-II research reactor. This research reactor, located at Dalat, used highly enriched uranium (HEU) fuel and went critical in 1963. It was used for training, research, and radioisotope production. The research reactor was shut down during the Vietnam War. After North Vietnam defeated the South in 1975 and reunified the country, the Vietnam Atomic Energy Commission (VAEC) was established in 1976 for civilian nuclear research. The International Atomic Energy Agency (IAEA) has provided technical cooperation (TC) assistance to Vietnam since it joined the Agency in 1978. In the early 1980s, the Soviet Union helped Vietnam restore and upgrade the research reactor to a 500 kw Russian VVR-M design. This research reactor was powered with highly enriched uranium, weapons-usable material which is considered to be a potential nuclear security risk. With U.S. assistance under the Department of Energy's Global Threat Reduction Initiative, since 2007, Vietnam has converted the Dalat research reactor from HEU to low enriched uranium (LEU) fuel, and returned the HEU fresh and spent fuel to Russia. The shipments, which removed a total of 11 kg of HEU, were completed in July 2013. This activity advanced U.S.-Vietnam cooperation in the nuclear nonproliferation sphere. As Vietnam's economy has grown, so have its energy demands, which, according to one source, grew by 15% annually in the first decade of the 2000s. To help keep pace, Vietnam plans to build its first nuclear power plants in the coming decades. Nuclear power is projected to provide 20%-30% of the country's electricity by 2050. Vietnam first began considering nuclear power as an option in a 1995 government study that recommended the introduction of nuclear energy by 2015. Feasibility studies were conducted in the late 1990s and early 2000s. In 2004, then-Prime Minister Phan Van Khai endorsed the "Strategy for Vietnam's Electricity Development 2004-2010." In 2006, the Prime Minister signed the "Strategy for Peaceful Uses of Atomic Energy up to 2020," which specified a nuclear power target of 2,000 megawatts of electric generating capacity (MWe) by 2020, and an eventual 20,000 MWe by 2040. The latter would represent 25%-30% of Vietnam's electricity production. Vietnam's National Assembly in November 2009 approved plans to build the first two 1,000 MWe reactors at Phuoc Dinh, Ninh Thuan province ( Ninh Thuan 1 plant) which were to come on-line by 2020. Two additional 1,000 MWe reactors are planned to be built in nearby Vinh Hai ( Ninh Thuan 2 plant) and be brought on-line by 2026 (see Figure 1 below). The country's nuclear energy plan envisioned a three-phase approach: Phase I, 2010-2015: training technical specialists, setting up regulatory frameworks and cooperation agreements, approval of licenses, etc. Phase II, 2015-2020: construction phase for first nuclear plants at Phuoc Dinh; beginning construction at Vinh Hai. Phase III, 2020-2030: additional reactor construction, up to an additional 6,000 MWe. The Vietnamese government issued a master plan in July 2011 that called for two additional reactors to be constructed at Phuoc Dinh by 2025 and two more at Vinh Hai by 2027, plus two larger reactors, possibly Korean, at another site to begin operating by 2029. Another 4,000 megawatts of planned capacity would bring the country's generating capacity to 14,800 megawatts by 2030. However, Vietnam's Prime Minister announced in January 2014 that it might delay construction of the first plant, at Phuoc Dinh, until 2020, potentially pushing back the planned completion of the first reactor to the mid-2020s. Difficulties in training staff for the planned nuclear power program have been mentioned by news reports as a possible reason for the delay. The Russian firm AtomStroyExport is to build two 1,200 MWe light-water reactors (standard commercial reactors) at the Ninh Thuan 1 power plant at Phuoc Dinh. They will be built on a turnkey basis, and will be operated by state-owned utility Electricity of Vietnam (EVN). As with other Russian-built nuclear power plants in non-nuclear weapon states, the contract includes a provision to both supply fuel and take back spent (used) fuel. The Russian atomic energy agency, Rosatom, will set up a training center in Vietnam to help prepare nuclear specialists. Cost estimates for the power plants vary; Rosatom reportedly has forecast the cost of the first two-reactor plants as up to $8 billion, but some press reports that included related infrastructure development estimate a total of $10 billion. Russia's Ministry of Finance is expected to finance the majority of these costs. Under the 2011 master plan, AtomStroyExport is to build two additional reactors at the site as well. Up to four light-water reactors at Ninh Thuan 2 are to be built by the Japanese consortium International Nuclear Energy Development of Japan Company (JINED). The Japanese government has offered low-interest and preferential loans for the project, as well as assistance in waste treatment and infrastructure support. According to the IAEA, Vietnam has no plans for developing a full fuel cycle capability. Current plans would store spent nuclear fuel on-site for at least 30 years, and studies on more permanent disposal are underway. As mentioned above, Russia will take back the spent fuel from the Russian-built plants. Other suppliers, such as Japan, do not usually do so, so Vietnam will need to explore spent fuel storage options. Vietnam is now exploring how to exploit its domestic uranium reserves in the north of the country, and is cooperating with Canadian and Japanese firms on initial exploration. Vietnam has signed a memorandum of understanding with India on uranium ore processing technologies. As of mid-2014, Vietnam's nuclear energy plans do not appear to have generated significant domestic opposition, though members of the Champa ethnic group, an ethnic minority in Vietnam, have said that the plants will infringe upon Champa villages and centers of worship in Ninh Tuan province and that the Vietnamese government has harassed individuals who have criticized the plants. It is unclear if the apparent absence of major opposition is due to widespread support for the government's energy vision, apathy or a lack of awareness, and/or a reluctance to challenge the government on one of its significant priorities. The U.S. nuclear industry may have a role in the reactor projects in Vietnam. The Japanese supply consortium, JINED, is offering boiling water reactor (BWR) and pressurized water reactor (PWR) designs for Ninh Thuan 2 , and Vietnam has not yet selected which type it will use. Japanese BWR designs are based on General Electric (GE) technology, while Japanese PWR designs originally came from Westinghouse (now mostly owned by Toshiba). Japan is largely self-sufficient in nuclear technology, but it is possible that some U.S. components and services would be used for the Vietnam project. JINED member Hitachi, for example, conducts nuclear business in Japan and around the world through joint ventures with GE. A U.S.-Vietnam 123 agreement would be helpful or even necessary for U.S. participation in Ninh Thuan 2 , depending on the types of components and services involved. This is because certain major reactor components would require Nuclear Regulatory Commission export licenses that cannot be approved without a 123 agreement, and approvals for other components and services that do not require export licenses could be more complicated without a 123 agreement. South Korea has also proposed building a nuclear power plant in Vietnam, for which the two countries are jointly preparing a feasibility study. The proposed South Korean reactors are based on designs licensed from the U.S. firm Combustion Engineering, which combined with Westinghouse in 2000. As a result, Westinghouse now controls the marketing of the design that South Korea plans to use in Vietnam. South Korea's only previous nuclear power plant export project, consisting of four reactors being built in the United Arab Emirates (UAE), is being implemented by a consortium that includes Westinghouse. Westinghouse and other U.S.-based firms are expected to receive 10% of the $20 billion UAE deal. If South Korea replicates that consortium for the proposed Vietnam project, a U.S.-Vietnam 123 agreement would probably be necessary. The UAE project also required a Part 810 technology transfer authorization by the Secretary of Energy. The number of potential U.S. jobs that may result from nuclear power projects in Vietnam is difficult to estimate, but the Barakah project now under construction by a Korean-led consortium in the UAE could provide a model. As noted above, Westinghouse and other U.S. companies are expected to carry out about 10% of the work on Barakah. The Export-Import Bank of the United States in September 2012 approved $2 billion in financing for U.S. equipment and services for Barakah, mostly to be provided by Westinghouse and its U.S. sub-suppliers. "The Barakah project will allow us to maintain about 600 U.S. jobs," Westinghouse said after the Ex-Im Bank financing approval. The Ex-Im Bank estimated that, overall, the $2 billion in financing would "support approximately 5,000 American jobs across 17 states." Items to be supplied by Westinghouse and other U.S. companies include reactor coolant pumps, reactor components, controls, engineering services, and training. The nuclear disaster at the Fukushima Daichi nuclear plant in Japan in March 2011 raised concerns around the globe about the readiness of new nuclear energy countries to have sufficient safety and regulatory infrastructure to prevent such disasters. The accident also raised worries about Vietnam's capacity to administer and regulate a nuclear energy sector. The authorities in Vietnam reacted to the Fukushima disaster by reaffirming Vietnam's commitment to pursuing nuclear power. In general, the situation sparked a global reexamination of emergency preparedness and risk assessment for nuclear power plants. Vietnam's coast has been subject to tsunamis in the past, and one study suggests more investigation is still needed on seismic conditions and tsunami risk. Also, in climate modeling exercises, Vietnam is often listed as one of the world's most vulnerable countries to the possible effects of climate change, particularly to rising sea levels. The nuclear disaster in Japan also heightened concerns about how to ensure adequate infrastructure, planning, and technical expertise and personnel in new nuclear power states. Vietnam is working closely with the International Atomic Energy Agency to meet all international safety standards and regulatory practices. The IAEA's Integrated Nuclear Infrastructure Review (INIR) mission has visited Vietnam multiple times and has developed milestones on the basis of international standards and expert recommendations. After the latest visit in 2014, the Vietnamese government announced a delay in the estimated start-up date for the first reactors, which experts view as giving Vietnam more time to develop its nuclear regulatory infrastructure and train technical personnel. Vietnam would be the first country in Southeast Asia to operate a nuclear power plant. As of early 2014, it was unclear whether other countries in the region have expressed concerns about Vietnam's nuclear energy plans. It is also unclear to what extent Vietnamese nuclear power planners are considering the energy needs and infrastructure projects of Vietnam's neighbors. Laos, for instance, is building or proposing to build dams for generating hydroelectric power along tributaries and the main stem of the Mekong River, which terminates in Vietnam. Plants such as these could generate power that could be sold to other countries in the region. Vietnam generally has opposed these dams, in part because of their possible negative impacts on the ecology, economies, and food security of downstream communities. Obama Administration officials have stated that the prospect of concluding a nuclear cooperation agreement with the United States spurred Vietnam to strengthen its nonproliferation policies. Vietnam has been a vocal supporter of nuclear disarmament and nonproliferation in international fora, and as a member of the Non-Aligned Movement. Vietnam's Law on Atomic Energy passed in 2008 forbids the development of nuclear weapons and all forms of nuclear proliferation. Vietnam is party to the major nonproliferation treaties (see Table 1 ), including the Nuclear Non-Proliferation Treaty (NPT), which it joined in 1982 as a non-nuclear weapon state. It has been an IAEA member since 1978 and its comprehensive safeguards agreement has been in force since 1990. Vietnam signed the Additional Protocol to its safeguards agreement in 2007, and it entered into force in 2012. Also, in cooperation with the IAEA and South Korea, Vietnam is developing a real-time tracking system for the movement of radiological materials in the country. Vietnam is also a member of the U.S.-led Global Nuclear Energy Partnership (GNEP), now called the International Framework for Nuclear Energy Cooperation (IFNEC). Vietnam has also joined the U.S.-led Global Initiative to Combat Nuclear Terrorism. In a move related to the bilateral nuclear energy agreement signing, in May 2014 Vietnam's government announced that it would participate in the multinational Proliferation Security Initiative (PSI), a U.S.-led group of about 100 countries that was established in 2003 to increase international cooperation in interdicting shipments of weapons of mass destruction (WMD), their delivery systems, and related materials. In the past, Vietnamese officials said they would not join PSI because it operates outside the United Nations system. As part of Vietnam's pledges at Nuclear Security Summits, it has removed all weapons-usable nuclear material from the country. In December 2010, the United States and Vietnam established a legal framework for U.S.-Vietnam cooperation for full conversion of its HEU-fueled research reactor to LEU fuel, and the return of HEU spent fuel from Dalat to Russia under the Department of Energy's Global Threat Reduction Initiative (GTRI). As noted, fresh HEU fuel was removed in 2007. The research reactor has been converted to LEU fuel, and the last shipment of HEU was completed in July 2013. Vietnam continues to develop its export control system. The U.S. State Department's Export Control and Border Security Program provides assistance to Vietnam to strengthen export controls in the country. In 2010, Vietnam issued regulations that would make any trafficking of nuclear materials in the country illegal. When reviewing the proposed agreement with Vietnam, Congress may wish to examine the extent to which Vietnam's export control system can prevent illicit transfers of nuclear materials and technologies. Enrichment and reprocessing (ENR) technology can be used both to make fuel for nuclear reactors or material for nuclear weapons. For the past several years, there has been some debate over whether the United States should ask countries, including Vietnam, to explicitly renounce enrichment and reprocessing as part of a civilian nuclear cooperation agreement. In early August 2010, the Wall Street Journal reported that the United States and Vietnam had discussed a proposed nuclear cooperation agreement that would not specifically commit Vietnam to refrain from enriching uranium. Responding to the Wall Street Journal report, the State Department spokesman said that the United States would welcome a commitment by Vietnam to refrain from pursuing enrichment, but added that such a commitment would be Vietnam's decision. A senior DOE official said in September 2010 that it would be "inappropriate" at this stage to ask Vietnam to forswear its fuel cycle options as part of a nuclear energy cooperation agreement. Vietnamese Atomic Energy Institute Director Vuong Huu Tan has said that Vietnam does not plan to pursue uranium enrichment. A commitment to forgo enrichment is not required for bilateral nuclear cooperation agreements under U.S. law or the Non-Proliferation Treaty (NPT), and most past 123 agreements have not included such a pledge. The recent agreement with the United Arab Emirates included a provision that would preclude enrichment or reprocessing in the UAE, and the United States has pursued similar pledges from other states in the Middle East. However, whether this policy would apply to other regions of the world was the subject of an Obama Administration interagency review from 2010 to 2013. Some Members of Congress and outside experts have argued that including a promise not to build enrichment and reprocessing facilities should be emulated in other agreements. The U.S.-Taiwan 123 agreement submitted to Congress on January 7, 2014, includes such "gold standard" prohibitions on enrichment and reprocessing within Taiwanese territory. Administration officials announced in December 2013 that the internal review had been completed, and there would be no change to U.S. policy. In other words, renouncing a domestic fuel-making capability would not be a prerequisite to concluding a nuclear cooperation agreement for all countries, and each partner country would be considered individually. At the same time, U.S. officials emphasize that while civilian nuclear cooperation agreements are one possible way to discourage additional countries from developing their own fuel-making (enrichment or reprocessing) technology, the United States will continue to pursue other incentives such as multilateral fuel banks to bolster partner countries' confidence in fuel supply. The Nuclear Suppliers Group (NSG) has also tightened restrictions on transfers of these technologies. Assistant Secretary of State Thomas Countryman testified on January 30, 2014: Make no mistake, our policy is to pursue 123 agreements that minimize the further proliferation of ENR technologies worldwide. The United States wants all nations interested in developing civil nuclear power to rely on the international market for fuel services rather than seek indigenous ENR capabilities. These capabilities are expensive and unnecessary, and reliable supply alternatives are available in the global fuel cycle market. The preamble of the agreement with Vietnam includes a political commitment that says Vietnam intends to rely on international markets for its nuclear fuel supply, rather than acquiring sensitive nuclear technologies. In addition, the United States promises to support international markets to ensure a reliable nuclear fuel supply for Vietnam. Although Vietnam apparently does not make a binding legal commitment to forswear ENR in the text of its 123 agreement, neither does the United States grant advance consent for those activities. Article 6 of the agreement specifically prohibits Vietnam from enriching or reprocessing U.S.-obligated nuclear materials --for instance, materials that are transferred from the United States--without specific future U.S. consent. In recent years, overlapping strategic and economic interests have led the United States and Vietnam to improve relations across a wide spectrum of issues. Obama Administration officials identify Vietnam as one of the new strategic partners they are cultivating as part of their "rebalancing" of U.S. priorities toward the Asia-Pacific, a move commonly referred to as the United States' "pivot" to the Pacific. In July 2013, President Obama and his Vietnamese counterpart, President Truong Tan Sang, announced in Washington, DC, a bilateral "comprehensive partnership" that is to provide an "overarching framework" for moving the relationship to a "new phase" in many areas, including science and technology cooperation in the field of nuclear energy. The U.S. embassy statement on the day the nuclear cooperation agreement was signed says that the agreement "reflects the strength and breadth of the U.S.-Vietnam Comprehensive Partnership." The United States and Vietnam share a concern over the rising strength of China, and they have cooperated in opposing China's perceived attempts to assert its claims to disputed waters and islands in the South China Sea. In December 2013, Secretary of State John Kerry in Vietnam announced that the United States would be providing Vietnam with $18 million in assistance, including five fast patrol vessels, to enhance Vietnam's maritime security capacity. The rise in bilateral economic ties also has strengthened the countries' interests in each other. Bilateral trade in 2013 was over $29 billion, nearly a 20-fold increase since the United States extended "normal trade relations" (NTR) treatment to Vietnam in 2001. The United States and Vietnam are 2 of 12 countries negotiating a Trans-Pacific Partnership (TPP) trade agreement. In order for the TPP agreement to go into effect, both houses of Congress would have to pass implementing legislation. The Obama Administration has also increased the priority given to cleaning up sites contaminated by Agent Orange/dioxin used by U.S. troops during the Vietnam War, an issue that several Members of Congress have championed. The U.S.-Vietnam nuclear cooperation agreement has been the end-goal of engagement in the nuclear field since the 2010 Memorandum of Understanding and is seen by many as expanding another bridge in the growing network of links between the two countries. Thus, those who question the direction, extent, or pace of recent improvements in U.S.-Vietnam relations may oppose the 123 agreement. A rejection of the agreement by Congress could have an impact on future U.S.-Vietnamese cooperation, including in the nuclear area, and could be interpreted by the Vietnamese as a symbolic rebuke of the new U.S.-Vietnam comprehensive partnership. The biggest obstacle to the two countries taking a dramatic step forward in their relationship is disagreement over Vietnam's human rights record. For more than a decade and a half, the ruling Vietnamese Communist Party (VCP) appears to have followed a strategy of permitting most forms of personal and religious expression while selectively repressing individuals and organizations that it deems a threat to the party's monopoly on power. For the past several years, according to many observers, repression against dissenters and protestors has worsened. The government increasingly has targeted bloggers and lawyers who represent human rights and religious freedom activists, particularly those linked to a network of pro-democracy activists. Many of the targeted blogs, bloggers, and lawyers have criticized Vietnam's policy toward China or have links to pro-democracy activist groups. As mentioned above, members of the ethnic minority group the Cham say that the Vietnamese government has harassed members who have criticized the planned construction of Vietnam's first two nuclear plants because they would be located in a Cham village. In November 2013, the United Nations General Assembly elected Vietnam to a seat on the United Nations Human Rights Council. That same month, Vietnam's National Assembly ratified new amendments to the country's constitution. Many voices called for lessening the VCP's role in society and policy. However, according to many observers, the final changes did little to weaken the Party's and the government's monopoly on power and legal ability to deny basic freedoms. Some sources argued the changes strengthened the VCP's authority and that new clauses added to protect basic rights were negated by other provisions in the revised constitution. As was true of their predecessors, Obama Administration officials have continuously expressed concerns--including via public criticisms--about human rights in Vietnam. Additionally, the two countries reportedly have often disagreed in the formal human rights dialogue that generally occurs every year. In general, however, bilateral differences over human rights have not prevented the United States and Vietnam from improving the overall relationship. Barring a dramatic downturn in Vietnam's human rights situation, U.S. officials appear to see the matter not as an impediment to short-term cooperation on various issues, but rather as a ceiling on what might be accomplished in the longer term. Over the past five years, criticisms of Vietnam's human rights record, including from Members of Congress, appear to have played a significant role in convincing the Administration to delay or oppose a number of items desired by Hanoi. Additionally, concerns about Vietnam's human rights record are likely to complicate Congress's debate over a TPP agreement, if the current negotiations are successful. It is unclear to what extent the Obama Administration has attempted to link the TPP negotiations directly to Hanoi making changes in its human rights conditions. Analysts offer different opinions about the extent to which such U.S. pressure would affect Vietnam's domestic policies, particularly when many in the Vietnamese polity view expressions of dissent as an existential threat to the current regime. Differences over human rights do not appear to have spilled over into the 123 agreement negotiations between the two governments. Human rights activists and other Vietnam watchers have argued that the United States should not advance bilateral ties with Vietnam in many areas until progress is made on the human rights agenda. During a January 2014 Senate Foreign Relations Committee hearing, some Senators called for the passage of a separate human rights bill in tandem with the U.S.-Vietnam nuclear cooperation agreement. As required by Section 123b of the Atomic Energy Act, the President announced in February 2014 his determination that a nuclear cooperation agreement with Vietnam "will promote, and will not constitute an unreasonable risk to, the common defense and security." The White House transmitted a package of documents to the Senate Foreign Relations Committee and the House Foreign Affairs Committee, to include the text of the agreement itself, a Nonproliferation Assessment statement, the presidential determination, and letters of concurrence by the Secretaries of Energy and State, and the Nuclear Regulatory Commission Chairman. The nuclear cooperation agreement complies with all the terms of the Atomic Energy Act as amended and therefore is a "non-exempt" agreement. This means that it may enter into force after the 90 th day of continuous session (a period of 30 plus 60 days of review) following its submittal to Congress on May 8, 2014, unless a joint resolution disapproving the agreement is enacted by both the House and Senate. Members of Congress may introduce resolutions of disapproval or approval during this time. If no resolution of disapproval is passed into law, then the agreement would automatically be eligible to enter into force after the 90-day review period is concluded. If a resolution of approval is passed before the 90 days have expired, then the agreement could enter into force sooner. Even before the official congressional review period, Members of Congress have weighed in on the debate over the U.S.-Vietnam nuclear cooperation agreement and Section 123 agreements generally. In December 2013, Representatives Ileana Ros-Lehtinen and Brad Sherman introduced a bill ( H.R. 3766 ) that would strengthen congressional approval procedures for agreements that did not include certain nonproliferation standards, including the pledge not to enrich or reprocess. The Senate Foreign Relations Committee held a hearing on January 30, 2014, on Section 123 agreements. Debate during the hearing spent some time on the issues surrounding the Vietnam nuclear cooperation accord. Some Senators said that a human rights bill on Vietnam would need to be passed if a nuclear cooperation agreement was to go forward. Three bills have been introduced to date that would approve the agreement with Vietnam. Senate Foreign Relations Committee Chairman Robert Menendez introduced a resolution that would approve the agreement ( S.J.Res. 36 ) on May 22. This bill was passed by the full Senate on July 31, 2014. On June 9, Senator Majority Leader Harry Reid introduced S.J.Res. 39 and Representative Adam Kinzinger with Ranking Member of the House Foreign Affairs Committee Eliot Engel introduced H.J.Res. 116 . As noted above, the 90 th day of the congressional review period was September 9, 2014. Since the agreement was not disapproved in that time, it may enter into force. Typically, such agreements enter into force after an exchange of diplomatic notes between the two countries.

U.S.-Vietnamese cooperation on nuclear energy and nonproliferation has grown in recent years along with closer bilateral economic, military, and diplomatic ties. In 2010, the two countries signed a Memorandum of Understanding that Obama Administration officials said would be a "stepping stone" to a bilateral nuclear cooperation agreement. This agreement was signed by the two countries on May 6, 2014, and transmitted to Congress for review on May 8. The required congressional review period for this agreement was completed in early September, and the agreement will enter into force after an exchange of diplomatic notes between the two countries. Under the agreement, the United States can license the export of nuclear reactor and research information, material, and equipment to Vietnam. The agreement does not allow for the transfer of restricted data or sensitive nuclear technology, and contains required nonproliferation provisions. The nuclear cooperation agreement complies with all the terms of the Atomic Energy Act as amended and therefore is a "non-exempt" agreement. This means that it may enter into force after a review period of 90 days of continuous session after its submittal to Congress (a period of 30 plus 60 days of review) unless Congress enacts a joint resolution disapproving agreement, or approving the agreement at an earlier date. Senate Foreign Relations Committee Chairman Robert Menendez introduced a resolution that would approve the agreement (S.J.Res. 36) on May 22. This bill was passed by the Senate on July 31, 2014. No equivalent bill was passed by the House. Vietnam would be the first country in Southeast Asia to operate a nuclear power plant. Vietnam has announced a nuclear energy plan that envisions installing several nuclear plants, capable of producing up to 14,800 megawatts of electric power (MWe), by 2030. Nuclear power is projected to provide 20%-30% of the country's electricity by 2050. Significant work remains, however, to develop Vietnam's nuclear energy infrastructure and regulatory framework. Since Vietnam has other commercial partners in the nuclear energy field, a lack of agreement with the United States would not be likely to have a significant impact on its nuclear energy plans. Vietnam's Law on Atomic Energy, passed in 2008, forbids the development of nuclear weapons and all forms of nuclear proliferation. In 2007, Vietnam signed the IAEA Additional Protocol, a significant nonproliferation safeguard for nuclear power, which entered into force in September 2012. Vietnamese officials have said they have no interest in developing domestic enrichment or reprocessing capabilities, which can potentially be used to make fissile material for nuclear weapons, but they have not made a binding commitment not to do so. Vietnam is exploring the possibility of eventually mining domestic uranium reserves. At least four issues were debated during the congressional review period for this agreement: (1) whether the agreement should have included stronger nonproliferation commitments such as a legally binding commitment by Vietnam not to build uranium enrichment and reprocessing facilities; (2) the extent to which Vietnam's human rights record should affect the decision to enter into a nuclear energy agreement; (3) the weight that should be given to the growing strategic relationship between the United States and Vietnam; and (4) the extent to which U.S. companies would benefit from an agreement.

The National Oceanic and Atmospheric Administration (NOAA) conducts scientific research in areas such as ecosystems, climate, global climate change, weather, and oceans; supplies information on the oceans and atmosphere; and manages coastal and marine organisms and environments. In 1970, Reorganization Plan No. 4 created NOAA in the Department of Commerce. Reorganization Plan No. 4 brought together environmental agencies from within the Department of Commerce, such as the National Weather Service, and from other departments and agencies, such as the Department of the Interior's Bureau of Commercial Fisheries and the National Science Foundation's National Sea Grant Program. The reorganization was intended to unify the nation's environmental activities related to oceanic and atmospheric research and to provide a systematic approach for monitoring, analyzing, and protecting the environment. One of NOAA's main challenges is related to this diverse mission of science, service, and stewardship. A review of research undertaken by the agency found that "the major challenge for NOAA is connecting the pieces of its research program and ensuring research is linked to the broader science needs of the agency." NOAA's administrative structure has evolved into five line offices: the National Ocean Service (NOS); National Marine Fisheries Service (NMFS); Office of Oceanic and Atmospheric Research (OAR); National Weather Service (NWS); and National Environmental Satellite, Data, and Information Service (NESDIS). In addition to NOAA's five line offices, Program Support (PS) provides cross-cutting services for the agency and includes the Office of Marine and Aviation Operations (OMAO), Corporate Services, the Office of Education, and Facilities. The Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 ) provided $5.441 billion for NOAA. President Obama has requested $5.975 billion for NOAA's FY2016 budget. This amount is $533.7 million (9.8%) more than the FY2015 enacted appropriation level. On June 3, 2015, the House passed the Commerce, Justice, Science, and Related Agencies Appropriations Act, 2016 ( H.R. 2578 , H.Rept. 114-130 ). The House-passed bill would provide a total of $5.169 billion for NOAA in FY2016. This amount is $271.7 million (5.0%) less than the FY2015-enacted appropriation level and $805.4 million (13.5%) less than the Administration's FY2016 request. On June 16, 2015, the Senate Committee on Appropriations reported the Commerce, Justice, Science, and Related Agencies Appropriations Act, 2016. The Senate committee-reported bill ( S.Rept. 114-66 ) would provide a total of $5.382 billion for NOAA in FY2016. This amount is $59.4 million (1.1%) less than the FY2015-enacted appropriation, $593.1 million (9.9%) less than the Administration's FY2016 request, and $212.3 million (4.1%) more than the level recommended by House-passed bill. In most years, more than 98% of NOAA's discretionary budget is appropriated to the Operations, Research, and Facilities (ORF) and the Procurement, Acquisition, and Construction (PAC) accounts. Over the last decade, PAC funding has grown because of funding increases for satellite acquisition and ORF funding has remained relatively constant (see Figure 1 ). Funding from ORF and PAC is provided across most of NOAA's line offices and Program Support. There also are several smaller specific appropriations accounts. These are listed below and included in Table 1 . Operations, Research, and Facilities (ORF) is NOAA's largest account, and it supports each of the agency's line offices and PS. The account provides funding for operating expenses including maintenance, salaries, benefits, utilities, grants, contracts, and other programmatic services. For FY2016, the Administration has requested $3.413 billion for the ORF account. The request is $211.0 million (6.6%) more than the FY2015 enacted level of $3.202 billion. The House-passed bill would provide $3.150 billion for the NOAA ORF account, which is $52.5 million (1.6%) less than the FY2015 enacted funding level and $263.5 million (7.7%) less than the Administration's FY2016 request. The Senate committee-reported bill would provide a total of $3.243 billion for the NOAA ORF account in FY2016. This amount is $40.3 million (1.3%) more than the FY2015 enacted appropriation, $170.6 million (5.0%) less than the Administration's FY2016 request, and $92.8 million (2.9%) more than the level recommended by the House-passed bill. The Procurement, Acquisition, and Construction (PAC) account provides funding for capital assets and investments such as the purchase of research vessels or the construction of facilities. PAC funding supports most of the agency's line offices, but the bulk of PAC funding (93.4% in FY2015) is appropriated for NESDIS satellite acquisition and construction. The Administration's FY2016 request would fund the PAC account at $2.499 billion, a $319.4 million (14.7%) increase over the FY2015 appropriation of $2.179 billion. The House-passed bill would provide $1.960 billion for the NOAA PAC account, which is $219.2 million (10.1%) less than the FY2015 enacted PAC funding level and $538.6 million (21.6%) less than the Administration's FY2016 request. The Senate committee-reported bill would provide a total of $2.079 billion for the NOAA PAC account in FY2016. This amount is $99.7 million (4.6%) less than the FY2015 enacted appropriation, $419.2 million (16.8%) less than the Administration's FY2016 request, and $119.5 million (6.1%) more than the level recommended by the House-passed bill. The Saltonstall-Kennedy Act of 1954 (15 U.S.C. SS713c-3) established a fund to promote U.S. fisheries research and development programs. The Promote and Develop Fishery Products and Research Pertaining to American Fisheries Fund is supported by a permanent appropriation of 30% of the import duties collected by the U.S. Department of Agriculture on fishery-related products. The American Fisheries Promotion Act of 1980 ( P.L. 96-561 ) amended the Saltonstall-Kennedy Act to authorize a competitive grant program for fisheries research and development projects and a national fisheries research and development program. However, most funding has been used to support fisheries management and research efforts conducted by NMFS. For FY2016, NOAA estimates that the Department of Agriculture will transfer a total of $143.7 million to NOAA. NOAA has requested that $13.6 million be used for the Saltonstall-Kennedy grant program. The remaining $130.2 million would be used to offset the appropriations requirements of the ORF account. This amount would be $14.2 million more than the transfer to ORF in FY2015. This transfer is not reflected in the ORF funding levels in Table 1 . The Pacific Coastal Salmon Recovery Fund (PCSRF) account was established under P.L. 106-113 to support West Coast Pacific salmon recovery efforts by providing grants to the states of Washington, Oregon, Idaho, Nevada, California, and Alaska and to federally recognized tribes of the Columbia River and Pacific Coast. Funds are used for projects necessary for the conservation of salmon and steelhead populations that are listed or at risk of being listed as threatened or endangered under the Endangered Species Act (ESA; P.L. 93-205 ). For FY2016, the Administration's request for the PCSRF account is $58.0 million, which would be a 10.8% decrease from the FY2015 funding level of $65.0 million. The House-passed bill would provide $65.0 million for the fund, which is equal to the FY2015 enacted funding level and $7.0 million (12.1%) more than the Administration's FY2016 request. The Senate committee-reported bill would provide a total of $65.0 million for the PCSRF in FY2016. This amount is equal to the FY2015 enacted appropriation, $7.0 million (12.1%) more than the Administration's FY2016 request, and equal to the funding level recommended by the House-passed bill. The Fisheries Finance Program provides long-term financing for the costs of construction or reconstruction of fishing vessels, fisheries facilities, aquacultural facilities, and individual fishing quota for certain fisheries. The program receives annual loan authority from Congress, but it has not required appropriated funds because it has generated a negative subsidy; that is, the credit program generates a positive return of approximately $6.0 million to the government each fiscal year. For FY2016, NOAA also has requested $10.3 million to implement refinancing of the Pacific Coast Groundfish Fishing Capacity Reduction loan as required by the Carl Levin and Howard P. "Buck" McKeon National Defense Authorization Act for Fiscal Year 2015 ( P.L. 113-291 ). Of the $10.3 million, $10 million would cover the estimated loss to the government from the reduced payments received under the new loan terms, and $300,000 would be for the subsidy cost to refinance the loan. NOAA compensates commercial fishermen for lost fishing gear, vessels, and resulting economic losses caused by obstructions related to oil and gas exploration, development, and production in any area of the outer continental shelf. Funding for the Fishermen's Contingency Fund is derived from receipts collected pursuant to the Outer Continental Shelf Lands Act Amendments of 1978 ( P.L. 95-372 ). Total funding is limited to $350,000 per fiscal year and can only be made to the extent authorized in appropriations acts. The Fisheries Disaster Assistance Fund was created to provide assistance for fishery disasters that were declared by the Secretary of Commerce in 2012 and 2013. Fishery disaster assistance is provided under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (MSFCMA; 16 U.S.C. SS1861) and the Interjurisdictional Fisheries Act (16 U.S.C. SS4107). The fund received an FY2014 appropriation for one-time funding, and annual appropriations for this purpose are not anticipated. All of the five line offices and Program Support are funded by the ORF account, and most of the offices also receive funding from the PAC account. In contrast to funding at the account level, most funding for NOAA's line offices is allocated among programs and activities according to agency authorities and priorities. NOS and NMFS authorities are related to coastal and ocean resource management, whereas NWS and NESDIS generally are related to weather and climate. Oceanic and Atmospheric Research (OAR) is the primary center for research within NOAA. In FY2015, more than 92% of OAR's budget is dedicated to research and development. Program Support provides support to activities across NOAA's line offices. Funding for each line office is provided in Table 2 . The following summaries also include selected appropriations highlights for each line office. The National Ocean Service (NOS) manages and protects coastal ocean and Great Lakes areas, provides navigation products and services, and prepares and responds to natural disasters and emergencies. For FY2016, the Administration has requested $550.8 million for NOS which would be $66.0 million (13.6%) more than the FY2015 enacted appropriation of $484.8 million. The House-passed bill would provide NOS with $466.5 million, $18.3 million (3.8%) less than the FY2015 enacted funding level and $84.3 million (15.3%) less than the Administration's request. The Senate committee-reported bill would provide a total of $501.1 million for NOS in FY2016. This amount is $16.3 million (3.4%) more than the FY2015 enacted appropriation, $49.7 million (9.0%) less than the Administration's FY2016 request, and $34.6 million (7.4%) more than the funding level recommended by the House-passed bill. Most of the requested funding increases for NOS would include programs funded under the authority of the Coastal Zone Management Act (16 U.S.C. SSSS1451-1464). The Administration has requested $54.1 million for coastal zone management and services, an increase of $12.4 million (29.8%) over the FY2015 enacted appropriation level of $41.7 million. The House-passed bill would fund coastal zone management and services at $40.0 million, a decrease of $1.7 million (4.1%) from the FY2015 enacted funding level and $14.1 million (26.1%) less than the Administration's request. The Senate committee-reported bill would fund coastal zone management and services at $39.6 million, a decrease of $2.1 million (5.1%) from the FY2015 appropriation level, $14.5 million (26.9%) less than the Administration's request, and $0.4 million (1.1%) less than the House-passed bill. The Administration also requested $116.1 million for coastal management grants, an increase of $45.0 million (63.2%) over the FY2015 enacted appropriation level of $71.1 million. The increase would expand funding for regional coastal resilience grants from $5.0 million in FY2015 to $50 million in FY2016. Managing development in high-hazard areas is a key element of most state plans funded under the CZMA, and in 2015, NOAA established the Regional Coastal Resilience Grants program to build community, ecosystem, and economic resilience in coastal areas. The House-passed bill recommends $65.0 million for coastal management grants, a decrease of $6.1 million (8.6%) from the FY2015 enacted funding level and $51.1 million (44.0%) less than the Administration's request. The Senate committee-reported bill would fund coastal zone management grants at $75.0 million, an increase of $3.9 million (5.4%) over the FY2015 appropriation level, $41.1 million (35.4%) less than the Administration's request, and $10.0 million (15.4%) more than the House-passed bill. The Senate Committee on Appropriations would maintain funding for regional coastal resilience grants at $5.0 million. The National Marine Fisheries Service (NMFS) is the lead federal agency for management and conservation of living marine resources and their habitat. The Administration has requested $888.2 million for NMFS, an increase of $66.1 million (8.0%) from the FY2015-enacted funding level of $822.1 million. In addition, the Administration has requested that $130.2 million be transferred into ORF from the Promote and Develop Fishery Products fund. The Administration's request also includes the following accounts that are related to fisheries: $58.0 million for the Pacific Coastal Salmon Recovery Fund; $350,000 for the Fishermen's Contingency Fund; and $10.3 million for the Fisheries Finance Program. The House-passed bill would fund NMFS at $830.7 million, an increase of $8.6 million (1.0%) over the FY2015 enacted appropriation level and $57.5 million (6.5%) less than the Administration's request. The Senate committee-reported bill would provide a total of $830.6 million for NMFS in FY2016. This amount is $8.5 million (1.0%) more than the FY2015 enacted appropriation, $57.6 million (6.5%) less than the Administration's FY2016 request, and $0.1 million less than the House-passed bill. NOAA's Office of Protected Resources supports protection of endangered species and marine mammals under the Endangered Species Act (ESA) and Marine Mammal Protection Act (MMPA; 16 U.S.C. SSSS1361 et seq.). NOAA proposes a total of $214.2 million for protected resources science and management, an increase of $33.5 million (18.5%) over the FY2015 appropriation of $180.7 million. The NOAA request includes a net increase of $13.2 million for consultation and permitting requirements of the ESA and MMPA, and it includes an increase of $17.0 million for the Species Recovery Grants, which supports states' and tribes' recovery efforts for species listed under the ESA. The House-passed bill recommends $180.2 million for protected species science and management, a decrease of $0.5 million (0.3%) from the FY2015 enacted funding level and $34.0 million (15.9%) less than the Administration's request. The Senate committee-reported bill would fund protected resources science and management at $182.0 million, an increase of $1.3 million (0.7%) over the FY2015 appropriation level, $32.2 million (15.0%) less than the Administration's request, and $1.8 million (1.0%) more than the House-passed bill. Most of the funding for fisheries science and management supports activities related to federal fisheries management under the Magnuson-Stevens Fishery Conservation and Management Act (MSFCMA; 16 U.S.C. SSSS1801 et seq.). According to NOAA, funding specific to the MSFCMA is approximately $551 million in FY2015. Most of this funding is included in the budget lines under fisheries science and management. The Administration has requested $546.1 million for fisheries science and management, $26.1 million (5.0%) more than the FY2015 enacted appropriation of $520.0 million. The House-passed bill recommends $529.7 million for fisheries science and management, an increase of $9.7 million (1.9%) over the FY2015 enacted funding level and $16.4 million (3.0%) less than the Administration's request. The Senate committee-reported bill would fund fisheries science and management at $529.6 million, an increase of $9.6 million (1.8%) over the FY2015 appropriation level, $16.5 million (3.0%) less than the Administration's request, and nearly the same as the House-passed bill. Oceanic and Atmospheric Research (OAR) is the primary center for research and development within NOAA. OAR conducts research in several major areas: weather and air chemistry; climate research; and ocean, coasts, and the Great Lakes. For FY2016, the Administration has requested $507.0 million for OAR, which would be $60.7 million (13.6%) more than the FY2015 enacted appropriation of $446.3 million. The House-passed bill would fund OAR at $453.1 million, $6.8 million (1.5%) more than the FY2015 appropriation level and $53.9 million (10.6%) less than the Administration's request. The Senate committee-reported bill would fund OAR at $456.1 million, an increase of $9.8 million (2.2%) over the FY2015 enacted appropriation level, $50.9 million (10.0%) less than the Administration's request, and $3.0 million (0.7%) more than the House-passed bill. The mission of OAR's climate research subprogram is to monitor and understand Earth's climate system. The Administration has requested $188.8 million for climate research, $30.8 (19.5%) million more than the FY2015 appropriation level of $158.0 million. Climate research includes funding for laboratories and cooperative institutes, regional climate data and information, and climate competitive research. The House-passed bill recommends $128.0 million for climate research, $30.0 million (19.0%) less than FY2015 enacted funding level and $60.8 million (32.2%) less than the Administration's request. The Senate committee-reported bill would fund climate research at $153.0 million, a decrease of $5 million (3.2%) from the FY2015 appropriation level, $35.8 million (18.9%) less than the Administration's request, and $25.0 million (19.5%) more than the House-passed bill. The objectives of the weather and air chemistry research subprogram are to provide accurate and timely warnings and forecasts of high-impact weather events and the scientific basis for management decisions related to weather, water, and air quality. The Administration has requested $97.3 million for weather and air chemistry research, $6.5 million (7.2%) more than the FY2015 appropriation level of $90.8 million. The House-passed bill recommends $120.5 million for weather and air chemistry research, $29.7 million (32.7%) more than the FY2015 enacted funding level and $23.2 million (23.8%) more than the Administration's request. A large portion of this increase was included in an amendment that would increase funding for weather research by $21.0 million. The additional funding generally supports activities that would be authorized in House-passed H.R. 1581 , the Weather Research and Forecasting Innovation Act of 2015. The Senate committee-reported bill would fund weather and air chemistry at $91.2 million, $0.4 million (0.4%) more than FY2015 appropriation level, $6.1 million (6.4%) less than the Administration's request, and $29.3 million (24.3%) less than the House-passed bill. The NOAA Ocean Acidification Program (OAP) was established by the Federal Ocean Acidification Research and Monitoring Act ( P.L. 111-11 ). OAP coordinates NOAA activities related to monitoring, research, and other efforts consistent with the Strategic Plan for the Research and Monitoring of Ocean Acidification . The Administration has requested $30.0 million for OAP, $21.5 million (253%) more than the FY2015 appropriation level of $8.5 million. The House-passed bill recommends $8.4 million for OAP, a small decrease of $54.0 thousand (0.6%) from the FY2015 enacted funding level and $21.6 million (71.9%) less than the Administration's request. The Senate committee-reported bill would fund OAP at $11.0 million, $2.5 million (29.4%) more than FY2015 appropriation level, $19.0 million (63.3%) less than the Administration's request, and $2.6 million (30.2%) more than the House-passed bill. The National Weather Service (NWS) provides weather, water, and climate forecasts. For FY2016, the Administration has requested $1,098.9 million for NWS, which would be $11.4 million (1.1%) more than FY2015 appropriation of $1,087.5 million. The House-passed bill would provide the NWS with $1,102.9 million, an increase of $15.4 million (1.4%) over the 2015 enacted funding level and $4.0 million (0.4%) more than the Administration's request. The Senate committee-reported bill would provide a total of $1,112.4 million for NWS in FY2016. This amount is $24.9 million (2.3%) more than the FY2015 enacted appropriation, $13.5 million (1.2%) more than the Administration's FY2016 request, and $9.5 million (0.9%) more than the House-passed bill. Generally, ORF and PAC NWS accounts and the main program areas identified in the budget would be funded in FY2016 at similar levels under the Administration's request, the House-passed bill, and the Senate Appropriations Committee-reported bill (see Table 3 ). The NOAA Administrator identified satellite operations as one of the greatest challenges that the agency faces. NESDIS acquires and manages environmental satellites and provides access to global environmental data. These data are used for weather forecasts; warnings of major weather events; environmental monitoring; climate investigations and studies; and search and rescue. For FY2016, the Administration has requested $2,379.6 million for NESDIS, an increase of $156.5 million (7.0%) over the FY2015 enacted appropriation of $2,223.1 million. The House-passed bill recommends $1,987.3 million for NESDIS, $235.8 million (10.6%) less than the FY2015 enacted funding level and $392.3 million (16.5%) less than the Administration's request. The Senate committee-reported bill would provide a total of $2,107.5 million for NESDIS in FY2016. This amount is $115.6 million (5.2%) less than the FY2015 enacted appropriation, $272.1 million (11.4%) less than the Administration's FY2016 request, and $120.2 million (6.0%) more than the House-passed bill. FY2015 funding for NESDIS satellite systems acquisition and construction is 93.4% of NOAA's PAC account funding and 37.4% of NOAA's total appropriation. The Administration's FY2016 request for NESDIS satellite system acquisition and construction is $2,189.3 million, which would be an increase of $154.8 million (7.6%) over the FY2015 appropriation of $2,034.5 million. The House-passed bill recommends $1,802.6 million for NESDIS satellite system acquisition and construction, $231.9 million (11.4%) less than the FY2015 enacted funding level and $386.7 million (17.7%) less than the Administration's request. The Senate committee-reported bill would provide a total of $1,918.4 million for NESDIS satellite system acquisition and construction in FY2016. This amount is $116.1 million (5.7%) less than the FY2015 enacted appropriation, $270.9 million (12.4%) less than the Administration's FY2016 request, and $115.8 million (6.4%) more than the House-passed bill. For FY2016, the Administration has requested $380.0 million for a new program called the Polar Follow-On. The House-passed bill does not include funding for this program, while the Senate Committee-reported bill would provide $135.0 million for it. The Polar Follow-On program would support efforts to ensure the future continuity of NOAA's polar satellite system. Polar-orbiting satellites constantly circle the earth in a north-south orbit. Data from polar-orbiting satellites are the primary input for weather prediction models. Currently, coverage is provided by the NOAA Suomi National Polar orbiting satellite, two defense meteorological satellites, and a European satellite. The Joint Polar Satellite System (JPSS) will replace current coverage with the launch of JPSS-1 in 2017 and JPSS-2 in 2021. JPSS will provide global environmental data such as cloud imagery, sea surface temperature, atmospheric profiles of temperature and moisture, atmospheric ozone concentrations, Arctic sea ice monitoring, search and rescue, and other data and services. The Polar Follow-On would extend operations of the overall polar satellite system (potentially to 2038) and support launch readiness dates for JPSS-3 (2024) and JPSS-4 (2026). According to NOAA, the Polar Follow-On would reduce the risk of a JPSS gap following the launch of JPSS-2. The Administration request, House-passed bill, and Senate Appropriations Committee-reported bill would provide identical funding levels for the following satellite acquisition programs: the Geostationary Operational Environmental Satellite - R (GOES-R) at $871.8 million, which reflects a planned decrease in funding of $109.0 million from the FY2015 enacted level; the JPSS at $808.9 million, which reflects a planned decrease in funding of $82.3 million and a $25.0 million reduction in the amount of planned carryover from FY2016 to FY2017; the JASON-3, a satellite altimetry mission that provides precise measurement of sea surface heights, at $7.5 million, which reflects a planned decrease in funding from $23.2 million in FY2015; and DSCOVR, a satellite that maintains real-time solar wind monitoring to detect space weather events such as geomagnetic storms, at $3.2 million, which reflects a planned decrease in funding from $21.1 million in FY2015. The Administration's request and the House-passed bill would fund the Constellation Observing System for Meteorology, Ionosphere, and Climate (COSMIC-2) at $20 million. This amount is $13.2 million more than the FY2015 enacted funding level of $6.8 million. However, the Senate committee-reported bill would fund COSMIC-2 at $10.1 million. COSMIC-2 would replace the current COSMIC system, which reached its design life in 2011. NOAA's FY2016 request and the House-passed bill would provide $2.5 million of new funding for the Space Weather Follow-On. This program would analyze options for the next space weather satellite because the design life of the DSCOVR spacecraft ends in 2019. The Senate Committee on Appropriations did not fund the space weather follow-on, but it instructed NOAA to submit a report to the committee detailing space weather data needs, options for collecting data, costs of these data, project timelines, and the impact of a space weather gap after 2019. Program Support (PS) provides management and services to most of NOAA's staff and line offices. The Program Support budget category generally is divided into two main areas: the Office of Marine and Aviation Operations (OMAO) and PS, which includes Corporate Services, the Office of Education, and Facilities. For FY2016, the Administration has requested $277.0 million for Corporate Services, the Office of Education, and Facilities, which would be an increase of $29.1 million (11.7%) over the FY2015 appropriation of $247.9 million. The House-passed bill recommends $210.7 million for PS, a decrease of $37.2 million (15.0%) from the FY2015 enacted funding level and $66.3 million (23.9%) less than the Administration's request. The Senate committee-reported bill would provide a total of $250.1 million for PS in FY2016. This amount is $2.2 million (0.9%) more than the FY2015 enacted appropriation, $26.9 million (9.7%) less than the Administration's FY2016 request, and $39.4 million (18.7%) more than the House-passed bill. NOAA requested $16.4 million for the Office of Education, a decrease of $11.2 million (40.6%) from the FY2015 enacted funding level of $27.6 million. The House-passed bill recommends $23.6 million for the NOAA education program, $4.0 million (14.5%) less than the FY2015 enacted funding level, and $7.2 million (43.9%) more than the Administration's request. The Senate committee-reported bill would provide a total of $26.6 million for the Office of Education in FY2016. This amount is $1.0 million (3.6%) less than the FY2015 enacted appropriation, $10.2 million (62.2%) more than the Administration's FY2016 request, and $3.0 million (12.7%) more than the House-passed bill. OMAO manages and operates aircraft and ships used for collecting data in support of NOAA's environmental and scientific mission. For FY2016, the Administration has requested $369.8 million for OMAO, $157.2 million (74.0%) more than the FY2015 appropriation of $212.6 million. The House-passed bill recommends $219.3 million for OMAO, $6.7 million (3.1%) more than the FY2015 enacted funding level and $150.5 million (40.7%) less than the Administration's request. The Senate committee-reported bill would provide a total of $225.1 million for OMAO in FY2016. This amount is $12.5 million (5.9%) more than the FY2015 enacted appropriation, $144.7 million (39.1%) less than the Administration's FY2016 request, and $5.8 million (2.7%) more than the House-passed bill. The House-passed bill and the Senate committee-reported bill do not include NOAA's request for $147.0 million to begin construction of a new oceanographic research vessel. Three amendments were included in the House-passed bill to restrict funding for specific NOAA activities. H.Amdt. 339 would restrict funding to enforce Amendment 40 of the Gulf of Mexico Red Snapper Fishery Management Plan. Red snapper are highly valued by recreational and commercial fishermen. Allocation generally involves the distribution of red snapper among fishing sectors (commercial and recreational) and among groups within a given sector (private and charter recreational fishermen). Historically, the recreational sector including charter and private fishermen landed fish under the same quota. Amendment 40 divides the recreational quota between the federal for-hire component (charter) (42.3%) and the private angling component (57.7%). Some private recreational fishermen claim that the charter component will gain a disproportionate share of the recreational quota under this arrangement. H.Amdt. 346 would restrict funding to further implement coastal and marine spatial planning and ecosystem-based management components of the National Ocean Policy developed under Executive Order 13547. On July 19, 2010, President Obama signed Executive Order 13547, which established a national policy for stewardship of the ocean, coasts, and Great Lakes. The President established the National Ocean Council (NOC) to coordinate and implement the national ocean policy. On April 16, 2013, the NOC released the National Ocean Policy Implementation Plan , which describes specific federal actions needed for enacting the policy. The Administration has presented the National Ocean Policy as a planning framework that operates within existing authorities. Some have questioned whether the Administration's proposal to implement such a policy is a new regulatory program and whether the Administration has the statutory authority to take these actions. Some also have asserted that marine spatial planning and ecosystem-based management may exclude some activities from ocean areas, such as recreational fishing and oil and gas development. H.Amdt. 354 would prohibit the use of funds for NOAA to implement recovery plans for salmon and steelhead populations listed under the ESA if the recovery plans do not address predation by non-native species. Some introduced fish species, such as striped bass and largemouth bass prey on native species such as juvenile salmon. This amendment attempts to encourage managers to address the management of introduced species and their predation on salmon as a factor related to salmon recovery. In his FY2016 budget request, President Obama has asked Congress to provide him with the authority to submit fast-track proposals to reorganize or consolidate federal programs and agencies. One such reorganization proposes to consolidate federal business and trade programs into one department. The Administration asserts that reorganization would create a more efficient and effective department that would promote U.S. competitiveness, exports, business, and jobs. Most Department of Commerce agencies would become part of the new department. NOAA would be incorporated into the Department of the Interior (DOI) to strengthen stewardship and conservation efforts and to enhance scientific resources. No additional information regarding how NOAA and DOI programs might be integrated has been given. A similar proposal for presidential authority and reorganization of federal business and trade programs was made in 2012, but there appeared to be little congressional support for the proposal. There has been a general trend to consolidate budget line items in NOAA's budget. In FY2016, NOAA is proposing to further restructure budget line items by combining program, project, and activity (PPA) lines. The largest changes would be to the NMFS budget. According to NOAA, restructuring would better align the NMFS budget to its programmatic and organizational needs and provide increased transparency and accountability. For example, seven PPAs under the Protected Species Research and Management program areas would be combined into two PPAs-Marine Mammals, Sea Turtles, and Other Species; and ESA Salmon. Also in NMFS, the Fisheries Research and Management subprogram, which currently has 15 PPAs, would be changed to Fisheries Science and Management, which would have 6 PPAs. Consolidating PPAs could make the reprograming of funds among related programs easier for the agency. However, the level of detail and allocation of funds among different activities that currently have distinct PPAs might become more difficult to discern in the NOAA budget justification. For example, Pacific and Atlantic salmon would be combined in one PPA; currently they have separate budget lines. The Senate Committee on Appropriations report to accompany H.R. 2578 ( S.Rept. 114-66 ) would adopt all of the budget structure revisions proposed in the NOAA budget request except for the proposal to consolidate Atlantic and Pacific salmon into a single PPA.

The National Oceanic and Atmospheric Administration (NOAA) conducts scientific research in areas such as ecosystems, climate, global climate change, weather, and oceans; supplies information and data on the oceans and atmosphere; and manages coastal and marine organisms and environments. In 1970, Reorganization Plan No. 4 created NOAA in the Department of Commerce. Reorganization Plan No. 4 brought together environmental agencies from within the Department of Commerce, such as the National Weather Service, and from other departments and agencies, such as the Department of the Interior's Bureau of Commercial Fisheries and the National Science Foundation's National Sea Grant Program. The reorganization was intended to unify the nation's environmental activities related to oceanic and atmospheric management and research and to provide a systematic approach for monitoring, analyzing, and protecting the environment. One of NOAA's main challenges is related to this diverse mission of science, service, and stewardship. A review of research undertaken by the agency found that "the major challenge for NOAA is connecting the pieces of its research program and ensuring research is linked to the broader science needs of the agency." The Consolidated and Further Continuing Appropriations Act of 2015 (P.L. 113-235), provided $5.441 billion for NOAA. President Obama has requested $5.975 billion for NOAA's FY2016 budget. This amount is $533.7 million (9.8%) more than the FY2015 enacted appropriation level. On June 3, 2015, the House passed the Commerce, Justice, Science, and Related Agencies Appropriations Act, 2016 (H.R. 2578). The House-passed bill would provide a total of $5.169 billion for NOAA in FY2016. This amount is $271.7 million (5.0%) less than the FY2015 enacted appropriation level and $805.4 million (13.5%) less than the Administration's FY2016 request. On June 16, 2015, the Senate Committee on Appropriations reported the Commerce, Justice, Science, and Related Agencies Appropriations Act, 2016. The Senate committee-reported bill would provide a total of $5.382 billion for NOAA in FY2016. This amount is $59.4 million (1.1%) less than the FY2015- enacted appropriation, $593.1 million (9.9%) less than the Administration's FY2016 request, and $212.3 million (4.1%) more than the House-passed bill. The following report provides a summary of actions taken by the Administration and Congress to appropriate funding for NOAA in FY2016. The summary compares the FY2015 enacted appropriations, the FY2016 Administration request, the House-passed bill, and the Senate committee-reported bill for NOAA's accounts, line offices, and selected programs. NOAA's two main accounts are Operations, Research, and Facilities (ORF) and Procurement, Acquisition, and Construction (PAC). NOAA's line offices include the National Ocean Service (NOS); National Marine Fisheries Service (NMFS); Office of Oceanic and Atmospheric Research (OAR); National Weather Service (NWS); and National Environmental Satellite, Data, and Information Service (NESDIS). In addition to NOAA's five line offices, Program Support (PS) provides cross-cutting services for the agency and includes the Office of Marine and Aviation Operations (OMAO), Corporate Services, the Office of Education, and Facilities.

An array of budget process reform proposals are put forth each year seeking to refine or modify the existing constitutional requirements, laws, and rules that make up the federal budget process. Some proposals may be designed to alter the budget process, for example attempting to improve transparency or oversight, perhaps by requiring additional information when weighing the merits of a measure. Other proposals may seek to alter the budget process in an effort to produce specific budgetary outcomes, for example by creating enforceable limits on spending or revenue levels. Altering the existing budget process can be achieved in a variety of ways. The House or Senate may adopt or amend a rule, either by agreeing to a freestanding simple resolution or by amending the chamber's standing rules. In addition, the House and Senate might agree to a concurrent resolution creating a rule enforceable in one or both chambers. For example, the annual concurrent budget resolution often includes rule-making provisions altering the congressional budget process. The budget process may also be amended in statue, requiring the signature of the President or the support of the two-thirds of each chamber required to override a veto. Amending the budget process in statute may be accomplished either in the form of freestanding legislation or as a provision in another measure, such as an appropriations bill or a measure to increase the debt limit. The budget process can also be altered more informally though changes in practice. For example, the House majority party leadership has released specific protocols, which although not formally enforceable on the floor, may govern the practices or customs of the chamber. Congress voted on an array of budget process reforms during 2011. In its rules package for the 112 th Congress, the House agreed to several rules changes affecting the congressional budget process, such as a prohibition against certain amendments to general appropriations bills. In addition, the House and Senate voted on a number of changes that were not adopted, including provisions in H.Con.Res. 34 , a budget resolution for FY2012, and H.R. 2560 , the Cut, Cap, and Balance Act of 2011. The Budget Control Act of 2011 (BCA), which was signed into law on August 2, 2011, significantly changed the federal budget process. Among other things, it created statutory discretionary spending limits, and created a Joint Select Committee on Deficit Reduction tasked with developing legislation that would reduce the deficit. Pursuant to the BCA, both the House and Senate voted on an amendment to the Constitution that would require a balanced federal budget. The following section identifies, tracks, and explains current budget process reform proposals reported from committee, or considered on the floor during 2012. The proposals are organized into categories related to the existing budget process. When appropriate, a brief description of the current process is provided. The Budget Act of 1974 provides for the annual adoption of a concurrent resolution on the budget as a mechanism for coordinating subsequent congressional decision making on budgetary matters. It is not a law-it is not signed by the President nor can it be vetoed. Instead, its purpose is to establish a framework within which Congress considers legislation dealing with spending and revenue legislation. The budget resolution includes enforceable levels of overall federal spending and revenue, as well as spending limits for each committee. The method in which the levels included in the budget resolution are enforced is by Members of Congress raising points of order against any subsequent legislation that is being considered on the floor, if it would violate the spending or revenue levels agreed to in the budget resolution. Such points of order, however, may be waived, either by a simple majority in the House or by three-fifths in the Senate. Budget process reform proposals often seek to alter the content, characteristics, or consideration of the budget resolution. Current support for such reform efforts may be strengthened by the fact that the House and Senate did not agree to a budget resolution for FY2011 or FY2012. On January 23, 2012, the House Rules committee held a mark-up and ordered reported H.R. 3575 , the Legally Binding Budget Act of 2011, which would require that the budget resolution be a joint resolution sent to the President for signature. As stated above, the budget resolution is presently a concurrent resolution, considered by both the House and Senate, but not sent to the President for his signature or veto. Instead, the President submits his preferred budgetary levels in his annual budget submission, as required by law, and in addition, he may sign or veto any legislation that Congress enacts implementing budgetary policy. By replacing the concurrent resolution with a joint resolution, H.R. 3575 would grant the President an additional role in setting preferred budgetary levels by granting him a direct role in deliberations on the congressional budget resolution. The new measure, H.R. 3575 , does not appear to alter the enforcement of the budget resolution. Although the measure would create the possibility for the budget resolution to become statute, the spending and revenue levels in the budget resolution would still be enforced by points of order, not by sequestration or any other statutory enforcement mechanism. Points of order, therefore, could still be waived, regardless of the budget resolution being in statute, because of Congress's constitutional authority over its own rules of procedure. H.R. 3575 also provides that in the event the joint budget resolution were vetoed by the President, the levels in the resolution would still be enforceable in the House and Senate in the way that a concurrent budget resolution presently operates. The House Rules Committee reported an amendment to the measure stating that the levels in the resolution would be enforceable in the House and Senate either after enactment, or 15 days after presentment to the President. Congress has the power to initiate rescission legislation that would cancel previously enacted budget authority. The President may propose rescissions, but if Congress does not enact the proposed rescission within 45 calendar days of continuous session after the message is received, the President must make the funds available for obligation. There is no requirement that Congress vote on such a rescission request, but if the rescission is sent pursuant to procedures outlined in the Impoundment Control Act, the recessions may be considered under expedited procedures. Such a rescission request from the President is currently submitted in the form of a special message including specific information about the rescission, such as the amount of the rescission, the account to which the rescission applies, reasons for the rescission, and, to the extent practicable, the estimated fiscal, economic, and budgetary effects of the rescission. Although now defunct, in 1996 the President was given the power of the "line item veto," which empowered him, after signing a bill, to cancel certain types of provisions. This power was ruled unconstitutional by the United States Supreme Court in the case Clinton, et al. v City of New York, et al . , which held that the Line Item Veto Act violated the Presentment Clause of the Constitution. H.R. 3521 , the Expedited Legislative Line-Item Veto and Rescissions Act of 2011, passed the House on February 8, 2012, by a vote of 254-173, after being reported from the House Budget Committee on January 7, 2012, and the House Rules Committee on February 2, 2012. Among other things, the bill seeks, generally, to maintain the President's current ability to request rescissions, and to enhance Congress's ability to take action on such rescissions by including expedited procedures for the consideration of such Presidential requests. The procedures prescribed in H.R. 3521 would expire at the end of 2015 and would apply only to rescissions of discretionary spending. The measure states that within 10 days of enactment of any spending measure, the President may submit a special message proposing rescissions to such measure. H.R. 3521 prescribes the contents of such a message, requiring more information than is required under current law, such as the account, project, or activity within the account, to which the rescission applies. H.R. 3521 allows the President to submit a second a second rescission message related to the same spending measure, but prohibits the message from including any rescissions included in the first package. H.R. 3521 states that if a proposed rescission has not yet been enacted, the President must make the funds proposed to be rescinded available no later than 60 days following the enactment of the original appropriations measure. H.R. 3521 includes expedited procedures for the consideration of such rescission packages in the House and Senate. The procedures provide for automatic discharge of the measure from committee if the committee does not report the package within a specified period. Further, H.R. 3521 would limit House and Senate floor debate and prohibit amendments to the rescission measure. H.R. 3521 requires that any rescissions enacted under this procedure be "dedicated only to reducing the deficit or increasing the surplus." The measure seeks to achieve this by requiring allocations associated with the budget resolution, as well as appropriations subcommittee allocations, to be revised downward to reflect savings achieved from the rescissions. In addition, the enactment of the rescission bill would similarly revise downward the statutory discretionary spending limits to reflect the savings achieved from the rescissions. A baseline is a projection of future federal spending and revenue levels based on current law. It is intended to provide information on future deficits or surpluses and to act as a benchmark for comparing proposed changes to budget policy. As described by the Congressional Budget Office (CBO), The baseline is intended to provide a neutral, nonjudgmental foundation for assessing policy options. It is not "realistic," because tax and spending policies will change over time. Neither is it intended to be a forecast of future budgetary outcomes. Rather, the projections ... reflect CBO's best judgment about how the economy and other factors will affect federal revenues and spending under existing policies. Specific rules for calculating the baseline appear in Section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985. In projecting the baseline, direct spending and receipts are generally assumed to continue at levels specified in existing law. These projections are based upon economic assumptions (e.g., economic growth, inflation, and unemployment) and other technical assumptions (e.g., demographic and workload changes) about future years. Discretionary spending levels are determined annually, so there is no obvious consensus as to what levels of discretionary spending best represent current policy. The level of discretionary spending, however, is assumed to stay constant in inflation-adjusted terms, meaning that the current year's spending level will be adjusted "sequentially and cumulatively" for inflation and other factors. Actual spending and revenue levels are not set by the baseline; they are set by spending and revenue legislation enacted by Congress and the President. While the Office of Management and Budget calculates their own baseline submitted with the President's budget, CBO submits the official congressional baseline to Congress in late January of each year each year as part of the Budget and Economic Outlook report. H.R. 3578 , the Baseline Reform Act of 2012, passed the House on February 3, 2012, by a vote of 235-177, after being marked up by the House Budget Committee on December 7, 2011, and reported from committee on January 30, 2012. The measure proposes to change the calculation of the baseline by removing the inflation adjustment made to discretionary spending. By removing the annual inflation adjustment for discretionary spending from the baseline calculation, nominal dollars stay the same but the purchasing power of discretionary spending would fall as inflation occurs. In addition, by holding the level of spending constant, the spending per person would decrease as the population grows. In the current baseline, the inflation adjustment rule is not in effect because the discretionary spending caps agreed to under the BCA have been incorporated into the baseline calculation for discretionary spending until 2021. The change to the baseline included in H.R. 3578 therefore would not be incorporated until 2022, with the exception of projected spending for "Overseas Contingency Operations," which is not subject to the discretionary spending limits. H.R. 3578 also requires CBO to submit a supplemental projection that assumes the extension of current revenue policy, regardless of such revenue policy being set to expire. Further, the measure requires CBO to submit a Long-Term Budget Outlook for the upcoming year that would cover at least the next 40 years. After a mark up on January 24, 2012, H.R. 3582 , the Pro-Growth Budgeting Act of 2011, was reported by the House Budget Committee on January 30. The bill would amend the 1974 Budget Act to require that CBO, to the extent practicable, prepare a macroeconomic impact analysis of each "major" measure reported from any House or Senate committee. The macroeconomic impact analysis, often referred to as a "dynamic estimate," would cover the 10-year period beginning with the first fiscal year, and the next 3 10-year periods. This information is to be prepared as a supplement, and not a replacement for estimates already required by CBO under Section 402 of the 1974 Budget Act, which requires CBO, to the extent practicable, to prepare for any measure reported from a House or Senate committee an estimate of the costs incurred in carrying out such a bill in the year it is to become effective as well as each of the next four years. Since 2003, House Rules have required a supplementary macroeconomic impact analysis of tax legislation reported by the House Ways and Means Committee (or a reason given for why it cannot be prepared). H.R. 3582 would expand the requirement for a macroeconomic impact analysis to all major measures reported from any House or Senate committee. Section 312(a) of the 1974 Budget Act requires that the enforcement of levels in the budget resolution be determined based on estimates provided by the Budget Committee. This neither requires nor prohibits the use of traditional or dynamic estimates for purposes of such budget enforcement. H.R. 3582 also requires CBO to submit a supplemental projection that assumes the extension of current revenue policy, regardless of such revenue policy being set to expire. Further, the measure requires CBO to submit a Long-Term Budget Outlook for the upcoming year that would cover at least the next 40 years, as also proposed in H.R. 3578 . H.R. 3581 , the Budget and Accounting Transparency Act, was passed by the House on February 7, 2012, by a vote of 245-180 after being was marked up by the House Budget Committee on January 24, 2012, and reported on January 31, 2012. The bill amends the Credit Reform Act and changes the budgetary treatment of Fannie Mae and Freddie Mac, among other things. Most outlays and revenues in the federal budget are measured on a cash-flow basis. In other words, the amounts flowing in and out of the government are recorded in the year when those flows occur. One exception is the treatment of federal loans and federal loan guarantees since enactment of the Federal Credit Reform Act of 1990 (2 USC 661). For federal loans and loan guarantees, only the subsidy costs inherent in those transactions are recorded on budget as outlays in the year that a loan or loan guarantee is made. Neither the amounts of the loan disbursed nor subsequently repaid enters the federal budget as an outlay. The subsidy cost of a federal loan or loan guarantee is calculated as the difference between the net present value of future expected expenses and income. Future expenses and income are discounted using the government's expected borrowing cost. H.R. 3581 modifies the Federal Credit Reform Act by requiring expenses and income to be discounted by a rate that includes a "fair value" risk adjustment, where fair value is defined by Financial Accounting Standards #157. The proposed adjustment is intended to represent the additional compensation (risk premium) that private lenders or insurers would require to take on the risks inherent in the transaction. This change would make the cost of government loans and loan guarantees more comparable to the cost of an equivalent transaction undertaken by private lenders or insurers. According to a 2004 CBO report, Using Treasury rates to discount expected cash flows neglects the cost of market risk and results in the systematic understatement of costs for both direct and guaranteed loans. Using risk-adjusted discount rates, which include the cost of market risk, would correct that understatement and improve the comparability of budgetary costs for credit and other programs. Opponents of H.R. 3581 argue that market risk is not relevant to the federal budget and a fair value adjustment would make loans and loan guarantees appear more costly than an equivalent grant or tax expenditure. A fair value adjustment was statutorily required for the budgetary treatment of the Troubled Asset Relief Program (TARP), and CBO sometimes presents additional information on costs under a fair value adjustment in their evaluations of credit programs. The practical effect of this change would be to increase the costs of federal loan and loan guarantees recorded in the budget, because interest rates on private loans are generally higher than government borrowing rates. CBO estimates that this change would increase recorded subsidy costs by $55 billion in 2012. H.R. 3581 would not change the availability of federal loans or loan guarantees through existing programs, or the interest or other fees paid by borrowers and received by the government. H.R. 3581 contains language that prevents this change from affecting budgetary enforcement rules and adjusts the discretionary spending caps created by the Budget Control Act to accommodate increases in recorded discretionary spending as a result of the subsidy re-estimates. Going forward, the change would affect the scoring of bills to create or modify loan and loan guarantee programs, however, which would affect their treatment under PAYGO rules, for example. According to CBO, the major programs affected by H.R. 3581 would be the Federal Housing Administration's and the Department of Veteran Affairs' mortgage guarantee programs, the Department of Education's student loan programs, the Department of Agriculture's credit programs for rural utilities, and the Small Business Administration's loan and loan guarantee programs. H.R. 3581 maintains the exemptions for the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Resolution Trust Corporation, the Pension Benefit Guaranty Corporation, national flood insurance, the National Insurance Development Fund, federal crop insurance, and the Tennessee Valley Authority from credit-reform accounting. H.R. 3581 would also move Fannie Mae and Freddie Mac on budget for as long as they remain in federal conservatorship. In previous fiscal years, Fannie Mae and Freddie Mac have appeared on budget only through the transfers that they have received from the Treasury Department on a cash flow basis since they were taken into conservatorship. Other provisions of H.R. 3581 would require two studies from CBO and OMB, and require federal agencies to make their budget justifications submitted to any congressional committee available online to the public on the same day. Overall, CBO estimates appropriations equal to $14 million would be required for the next five years across relevant agencies in order to comply with all provisions of H.R. 3581 .

An array of budget process reform proposals are put forth each year seeking to refine or modify the existing constitutional requirements, laws, and rules that make up the federal budget process. This report identifies, tracks, and explains current budget process reform proposals reported from committee or considered on the floor during 2012. The proposals are organized into categories related to the existing budget process. When appropriate, a brief description of the current process is provided. Measures included in this report are H.R. 3575, the Legally Binding Budget Act of 2011; H.R. 3521, the Expedited Legislative Line-Item Veto and Rescission Act of 2011; H.R. 3578, the Baseline Reform Act of 2012; H.R. 3582, the Pro-Growth Budgeting Act of 2011; and H.R. 3581, the Budget and Accounting Transparency Act of 2011.

On October 16, 2008, EPA Administrator Stephen Johnson announced his final approval of a more stringent National Ambient Air Quality Standard (NAAQS) for lead. The publication of the revised standard in the Federal Register , on November 12, 2008, was the final step in a multi-year review process. When the previous standard for lead was promulgated in 1978, lead was a widespread air pollutant. Eighty to ninety percent of it was emitted by the nation's automobiles and trucks, a majority of which ran on leaded gasoline. Leaded gasoline was gradually phased out in the 1970s, 1980s, and early 1990s, and both emissions and concentrations of lead in the air plummeted. Emissions fell more than 98% from 1980 to 2007. Ambient concentrations (the quantity of lead in the air) fell by 94%. As of March 12, 2008, only two areas with a combined population of 4,664 people had air that remained in violation of the 1978 lead NAAQS. These developments led some to suggest that there was no longer a need for an ambient air quality standard for lead. Others, including the independent scientific advisory panel that advises EPA's Administrator, concluded that the 1978 NAAQS was far too lenient, that lead in ambient air still poses a threat to public health, and that the NAAQS needed to be significantly strengthened as the result of the recent review. In promulgating a new standard, the Administrator agreed with his scientific advisers, lowering the standard to 90% below the 1978 standard and setting new requirements for monitoring. This report provides background on NAAQS, the process used to establish them, the factors leading to the reduction in lead emissions, the proposed and final changes to the lead standard and related monitoring requirements, as well as information regarding the potential effects of the revision. NAAQS are standards that apply to ambient (outdoor) air pollutants that exhibit two characteristics: (1) they may reasonably be anticipated to endanger public health or welfare; and (2) their presence in the air results from numerous or diverse mobile or stationary sources. The Clean Air Act provides for two types of NAAQS: primary standards, "the attainment and maintenance of which in the judgment of the [EPA] Administrator ... are requisite to protect the public health," with "an adequate margin of safety"; and secondary standards, necessary to protect public welfare, a broad term that includes damage to crops, vegetation, property, building materials, etc. NAAQS are at the core of the Clean Air Act, even though they do not directly regulate emissions. In essence, they are standards that define what EPA considers to be clean air. Once a NAAQS has been set, EPA uses monitoring data and other information submitted by the states to identify areas that exceed the standard and must, therefore, reduce pollutant concentrations to achieve it. After these "nonattainment" areas are identified (which EPA estimates will occur by January 2012 at the latest for the new lead standard), state and local governments must produce State Implementation Plans outlining the measures they will implement to reduce pollution levels and attain the standards. Lead nonattainment areas will have five years after their designation to actually attain the standard, with a possible extension of five more years. As will be noted in more detail later, most areas of the country do not monitor lead concentrations in ambient air. Thus, in addition to strengthening the lead standard, the Administrator expanded the requirements for lead monitoring. Installing the additional monitors and compiling up to three years of data to determine compliance is the main reason that implementing the new standard is likely to be a lengthy process. In addition to requiring states to submit implementation plans, EPA also acts to control many of the NAAQS pollutants wherever they are emitted, through national standards for products that might emit them (particularly fuels) and through emission standards for new stationary sources (e.g., lead smelters). The Clean Air Act requires the agency to review each NAAQS every five years. That schedule is rarely met, but it often triggers lawsuits that force the agency to undertake a review. In the case of lead, the last review of the NAAQS was completed in 1978. The Missouri Coalition for the Environment and others filed suit against EPA over its failure to complete a review in 2004, and a consent decree established the schedule EPA followed in reviewing the standard. The schedule required EPA to propose any revision of the standard by May 1, 2008, and to promulgate a final decision by October 15, 2008. Reviewing an existing NAAQS is a long process. As a first step, EPA scientists review the scientific literature published since the last NAAQS revision, and summarize it in a report known as a Criteria Document or Integrated Science Assessment. Generally, there are hundreds or thousands of scientific documents reviewed, covering such subjects as environmental concentrations, human exposure, toxicology, animal studies and animal-to-human extrapolation, epidemiology, effects on vegetation and ecosystems, and effects on man-made materials. A second document that EPA prepares, the Staff Paper or Policy Assessment, summarizes the information compiled in the Criteria Document and provides the Administrator with options regarding the indicators, averaging times, statistical form, and numerical level (concentration) of the NAAQS. To ensure that these reviews meet the highest scientific standards, the 1977 amendments to the Clean Air Act required the Administrator to appoint an independent Clean Air Scientific Advisory Committee (CASAC). CASAC has seven members, largely from academia and from private research institutions. In conducting NAAQS reviews, their expertise is supplemented by panels of the nation's leading experts on the health and environmental effects of the specific pollutant or pollutants under review. These panels can be quite large. The 2005-2008 lead review panel had 15 members, in addition to the 7 statutory members of CASAC. CASAC and the public make suggestions regarding the membership of the panels on specific pollutants, with the final selections made by EPA. The panels review the agency's work during NAAQS-setting and NAAQS-revision, rather than conducting their own independent reviews. The pollutants to which NAAQS apply are generally referred to as "criteria" pollutants. Six pollutants are currently identified as criteria pollutants: ozone, particulates, carbon monoxide, sulfur dioxide, nitrogen oxides, and lead. The EPA Administrator can add to this list if she determines that additional pollutants meet the act's criteria (endangerment of public health or welfare, and numerous or diverse sources); she can delete them if she concludes that they no longer do so. Whether lead still met these criteria was one of the issues EPA considered in its review of the standard. The reduction of lead emissions is often described as one of the key successes of the Clean Air Act and of the Environmental Protection Agency. In 1970, emissions of lead totaled 224,100 tons. By 2007, emissions had been reduced more than 99%, to 1,300 tons. Little of that success is attributable to the setting of a NAAQS, however. The agency did not set a NAAQS for lead until 1978 (by which time lead emissions had already declined about 40%), and it established the NAAQS then only as a result of a lawsuit filed by the Natural Resources Defense Council and others. After promulgating the NAAQS, the agency did not identify nonattainment areas until 1991. The great bulk of the lead reductions "occurred prior to 1990," according to EPA. So, in general, the reduction of lead in ambient air did not come about as a result of the 1978 NAAQS, or in the manner prescribed by Title I of the Clean Air Act, wherein nonattainment areas are identified and the states or areas in which they are located submit to EPA State Implementation Plans that identify local and national measures that will be implemented to help such areas reach attainment. Most of the reduction was a side-benefit of other Clean Air Act programs, especially the regulation of emissions from new automobiles, beginning in the 1970s. In order to meet more stringent requirements for emissions of hydrocarbons, nitrogen oxides, and carbon monoxide, which took effect in 1975, the auto industry installed catalytic converters on new cars. Gasoline with lead additives would have fouled the catalytic converters, rendering them useless; so, in anticipation of the converters' widespread adoption, EPA mandated the sale of unleaded fuel in the early 1970s, and eventually banned the use of lead in gasoline entirely. Being a metal, lead remains in the environment even though emissions have declined. Thus, although human exposure to lead has declined, it has not done so by as much as the decrease in emissions would suggest. Furthermore, research conducted since the 1970s suggests that lead has significant health impacts at levels well below those previously considered safe. Current sources of emissions include utility and other boilers, leaded fuel still used in some general aviation airplanes, trace lead contaminants in diesel fuel and gasoline, lubricating oil, iron and steel foundries, primary and secondary lead smelters, hazardous waste incinerators, and about 30 smaller categories of sources. In addition, there continues to be exposure from lead particles in soil or dust re-suspended in the atmosphere as a result of vehicular traffic, construction, agricultural operations, and the wind. As a result of the review it completed in 2008, EPA decided to deal with the remaining issue of lead in ambient air by both strengthening the lead NAAQS and by expanding the network of monitors that are used to measure attainment. The primary (health-based) standard, promulgated in 1978, was 1.5 micrograms per cubic meter (ug/m 3 ) averaged over three months. With the exception of two small areas (one in Montana, one in Missouri), the United States has attained this standard, but the NAAQS review found evidence of health effects at the levels of exposure currently experienced by much of the U.S. population. The Staff Paper reported "significant associations between Pb [lead] exposures and a broad range of health effects," including, in children, neurological effects, notably intellectual attainment, attention, and school performance, with "long-term consequences over a lifetime." The Staff Paper also reported effects on the immune system, with "increased risk for autoimmunity and asthma." In adults, the Staff Paper found associations between lead exposure and "increased risk of adverse cardiovascular outcomes, including increased blood pressure and incidence of hypertension, as well as cardiovascular mortality." Lead exposure also was associated with reduced kidney function, with adverse impacts enhanced in those with diabetes, hypertension, and chronic renal insufficiency. As a result, both EPA staff and the CASAC recommended strengthening the NAAQS. According to the Staff Paper: Staff concludes that it is appropriate for the Administrator to consider an appreciable reduction in the level of the standard, reflecting our judgment that a standard appreciably lower than the current standard could provide an appropriate degree of public health protection and would likely result in important improvements in protecting the health of sensitive groups. We recommend that consideration be given to a range of standard levels from approximately 0.1-0.2 ug/m 3 (particularly in conjunction with a monthly averaging time) down to the lower levels included in the exposure and risk assessment, 0.02 to 0.05 ug/m 3 . CASAC concurred, stating in a January 22, 2008 letter that it "... unanimously affirms EPA staff's recognition of the need to substantially lower the level of the primary NAAQS for Lead, to an upper bound of no higher than 0.2 ug/m 3 ...." The Administrator agreed that the primary NAAQS should be substantially lowered, choosing a level of 0.15 ug/m 3 . The Administrator also proposed two options for revising the averaging time and form used to determine whether an area meets the standard. Instead of the former not-to-be-exceeded form, based on quarterly (3-month) averages of lead concentrations, the proposal would have either revised the current averaging form to clarify that it applies across a three-year span (i.e., to demonstrate attainment, an area would need to show quarterly readings lower than the standard for 12 consecutive quarters); or the proposal would revise the measure to the second highest monthly average in a three-year span. According to agency staff, this latter form would better capture short-term increases in lead exposure, while allowing the average from one bad month (perhaps resulting from unusual meteorological conditions) to be disregarded. The agency noted that "control programs to reduce quarterly mean concentrations may not have the same protective effect as control programs aimed at reducing concentrations in every individual month." CASAC also recommended that consideration be given to changing from the calendar quarter to the monthly averaging time. In making that recommendation, CASAC emphasized support from studies suggesting that blood lead concentrations respond at shorter time scales than would be captured completely by quarterly values. The Administrator chose neither of these options. Instead, the agency will use a rolling three-month average, evaluated over a three-year period: any three-month average exceeding the standard will be considered a violation of the NAAQS. For a nonattainment area to be subsequently redesignated to "attainment," the area would have to have three years of rolling three-month averages that met the standard. This is somewhat more stringent than the previous averaging time (calendar quarters), but not as protective as the second highest monthly average would have been. As shown in Figure 1 , 17 counties have monitors showing nonattainment using the new standard. (By comparison, only portions of two counties violated the old standard.) As will be discussed in more detail below, less than 3% of the nation's counties have active lead monitors. Thus, more counties may be found in nonattainment once the monitoring network is expanded. As part of its current review, EPA also assessed the secondary (public welfare) NAAQS for lead. The secondary standard has been identical to the primary standard. The agency concluded that: A significant number of new studies have been conducted since 1978 that associate lead pollution with adverse effects on organisms and ecosystems. However, there is a lack of evidence linking various effects to specific levels of lead in the air. Lacking such evidence, the Administrator continued the practice of making the secondary standard identical to the primary standard. Besides finding that the 1978 NAAQS was inadequate to protect public health and welfare, EPA's review concluded that "[t]he current monitoring network is inadequate to assess national compliance with the proposed revised lead standards." Only 70 of the roughly 3,000 counties in the United States (2.3%) had active lead monitors in 2008, leaving many areas of the country without any means of determining whether they were in violation of the lead NAAQS. Twenty-four entire states, including some with major sources of lead emissions, had no lead monitors. Under the old (1978) standard, this was not much of an issue. There were, at one time, about 900 lead monitors in operation; but, as lead emissions decreased and as the monitors showed consistent attainment of the standards, many of the monitors were shut down or removed. With a substantially more stringent standard, however, it cannot be assumed that areas without monitors are still in attainment. The locations of monitors and of the major sources of lead emissions are shown in Figure 2 . The figure shows that large sources of emissions in Alaska, Arizona, Arkansas, Florida, Illinois, Indiana, Iowa, Kansas, Michigan, Mississippi, Nebraska, New York, Oklahoma, Tennessee, Texas, Utah, Virginia, Wisconsin, and other states appear to be located more than 100 miles from the nearest ambient monitor. To address this shortfall, EPA proposed--in addition to the revised lead NAAQS--to require monitors near all sources of lead that exceed a threshold of between 200 and 600 kilograms (441 to 1,323 pounds) of emissions per year. The agency also proposed to require a small network of monitors to be placed in urban areas with populations greater than one million to gather information on the general population's exposure to lead in the air. In the final rule, the Administrator chose thresholds different than proposed: he set the source threshold at one ton of emissions rather than 200-600 kilograms, and required monitors in urban areas with populations of 500,000 or more rather than one million. The final choice appeared to have reflected concerns by industry groups, including the Battery Council International, who argued that emphasis should be placed more on exposure-oriented monitoring than on specific sources of emissions. The monitoring decision was challenged by the Natural Resources Defense Council, Missouri Coalition for the Environment Foundation, and two other groups: they petitioned the agency for reconsideration of the monitoring requirements, in January 2009. EPA agreed to a reconsideration in July and proposed changes to the monitoring rule on December 23. In the December proposal, EPA reverted to a 0.5 ton threshold for source-oriented monitors. The agency also proposed eliminating the required monitoring in areas with populations of 500,000 or more, in favor of a network of approximately 80 multi-pollutant monitoring sites known as NCore. The NCore network would include 60 sites located in urban areas and about 20 sites located in rural areas. In all, EPA estimates that the proposal would increase the number of monitors by about 140. The states remain free to install more monitors than EPA requires, but finding the money to do so might be difficult at a time when many of the states are experiencing a shortage of revenues. EPA estimated the initial cost of the network (as required by the 2008 rule) at $4.5 million, and the operational costs at $3.5 million annually. The agency estimated that the December 2009 rule would increase ambient air monitoring costs by an additional $1.8 million. To address these costs (and the costs of new monitoring requirements for other NAAQS pollutants), EPA has requested an additional $15 million in its FY2011 budget. The agency is also requesting an $82.5 million (36%) increase in total budget authority for state and tribal assistance grants in FY2011, in part to support activities related to the implementation of new NAAQS. Perhaps the two largest issues raised during the lead NAAQS review process--whether a NAAQS was still needed, and whether the Administrator's proposed range of standards reflected the scientific advice he received--have been resolved, with little remaining controversy. CASAC and EPA staff both concluded that airborne lead still meets the NAAQS criteria (endangerment of public health or welfare, and numerous or diverse sources). Rather than support the deletion of lead from the list of criteria pollutants, they concluded that lead in ambient air still poses a threat to public health, that the old NAAQS (established in 1978) was far too lenient, and that the 1978 NAAQS needed to be significantly strengthened. The Administrator agreed. A second major issue was whether the proposed range of standards (as opposed to the final, promulgated version) was supported by the available science. The range proposed by the Administrator, while substantially stronger than the 1978 standard, would have allowed him to set a final NAAQS 50% higher (i.e., less stringent) than the least stringent level recommended by both EPA's scientific staff and by the independent CASAC panel. Given uncertainties in the science (particularly the estimated correlation between airborne lead and blood lead levels and the uncertainties in the concentration-response functions--i.e., the effect that changes in blood lead levels have on IQ), the Administrator stated in the May 2008 proposal that his decision would be supported by the science at any point in the proposed range of 0.10 to 0.30 ug/m 3 . His final choice (0.15 ug/m 3 ) fell within the range recommended by EPA staff and CASAC, and, thus, did not provoke controversy. At that level, the standard was supported by the staff's conclusions, which were themselves based on the review of more than 6,000 scientific studies, and by the unanimous conclusions of the 22-member CASAC review panel. There are, of course, some who wanted weaker or stronger standards. In comments on the proposed range, some commenters expressed disappointment that the Administrator did not consider the potential economic impacts in making his choice. These comments were echoed by the Association of Battery Recyclers (ABR), following the Administrator's decision: in press reports, an ABR representative stated that the new standard "potentially threatens the viability of the lead recycling industry." The Clean Air Act does not allow the consideration of costs or economic impacts in the setting of NAAQS, however--a point underlined by the Supreme Court in a unanimous 2001 decision, and repeated by the agency in announcing the final decision. Thus, the Administrator appears to have been on firm ground in rejecting economic arguments. Others, including EPA's Children's Health Protection Advisory Committee (CHPAC), argued for a stronger standard. CHPAC cited evidence that lead exposure at low levels poses even greater harm per unit of lead than does exposure at higher levels, and argued that the standard should be set at 0.02 ug/m 3 , almost an order of magnitude below the Administrator's final choice. Despite that recommendation, criticism was muted in the wake of the Administrator's decision, with most environmental groups expressing support. A typical reaction was that of Dr. John Balbus, a member of CHPAC and the Chief Health Scientist on the staff of the Environmental Defense Fund: "While EPA's own analysis justifies an even lower lead standard, this tenfold reduction will go a long way to protecting children most at risk from airborne lead.... It's refreshing to see the agency follow the science and the advice of its experts in making this decision." Although the Administrator is prohibited from taking costs or economic factors into consideration in setting a NAAQS, the agency generally does prepare a Regulatory Impact Analysis (RIA) for information purposes, and to comply with an executive order. The RIA analyzes in detail the costs and benefits of new or revised NAAQS standards. The agency released an RIA for the final lead standard as part of the final regulatory package, October 16, 2008. The RIA presented a range of both costs and benefits from the new standard, assuming full implementation of control measures in 2016. Both the cost and benefit ranges were large, and EPA stressed that "there are important overall data limitations and uncertainties in these estimates." In general, costs and benefits may be understated, because the study developed estimates only for the 17 counties that currently have monitors showing nonattainment. Until new monitors are installed, the agency has no way of estimating how many additional areas will be affected by the standard, but the RIA emphasizes that "... there may be many more potential nonattainment areas than have been analyzed in this RIA." The cost estimates ranged from $150 million annually in 2016 to as much as $2.8 billion, 19 times as much. The difference is attributable to EPA's inability to demonstrate attainment of the standard in all areas through the application of identified control technologies. The RIA states: For the selected standard of 0.15 ug/m 3 , over 94% of the estimated emission reductions needed for attainment are achieved through application of identified controls, and less than 6% through unspecified emission reductions. Identified point source controls include known measures for known sources that may be implemented to attain the selected standard, whereas the achievement of unspecified emission reductions requires implementation of hypothetical additional measures in areas that would not attain the selected standard following the implementation of identified controls to known sources. The known controls are estimated to cost $130 million to $150 million annually, depending on the discount rate chosen. But the unspecified emission controls are estimated at from $20 million to $3.1 billion annually depending on the methodology used. A key feature of EPA's analysis is that it assumed all emission reductions would come from controls on point source emissions (e.g., smelters, foundries, incinerators, etc.). But, according to the agency, 45% of emissions come from aviation fuel. In October 2006, EPA received a petition from Friends of the Earth to reduce or eliminate lead from aviation gasoline. The agency, in coordination with the Federal Aviation Administration (FAA), is analyzing the petition. The RIA does not address the costs or benefits of such a step. In addition, the agency notes: ...in this RIA we have not accounted for the effect of improvements that tend to occur, such as technology improvement, process changes, efficiency improvements, materials substitution, etc. We believe these typical improvements will tend to result in more cost effective approaches than simply adding extremely expensive pollution controls in many areas by the attainment date of 2016. Many industrial sources of lead emissions emit very small quantities of lead in absolute terms. Our cost modeling shows that some could face significant costs to reduce these low levels of lead, costs which could be prohibitively expensive. Rather than applying additional controls, it may be possible for firms emitting small amounts of Pb [lead] to modify their production processes or other operational parameters, including pollution prevention techniques, which would be more cost effective than adding additional control technology. Such measures might include increasing the enclosure of buildings, increasing air flow in hoods, modifying operation and maintenance procedures, changing feed materials to lower Pb content, measures to suppress dust from tailings piles, etc. The RIA estimates that benefits of the NAAQS will range from $3.7 billion to $6.9 billion annually in 2016--and, thus, that benefits will outweigh costs at all points in the estimated range. The benefits mostly represent the expected increase in lifetime earnings that would result from children under seven years of age avoiding IQ loss due to exposure to lead. The RIA focuses primarily on children's health effects. It does not attempt to estimate the changes in lead-related health effects among adults. Unquantified health effects include: Hypertension Non-fatal coronary heart disease Non-fatal strokes Premature mortality Other cardiovascular diseases Neurobehavioral function Renal effects Reproductive effects Fetal effects from maternal exposure (including diminished IQ). It is beyond the agency's capability, at present, to quantify these effects. Thus, the benefits, just like the costs, are subject to substantial uncertainty. The lead NAAQS was less controversial than the recent NAAQS decisions on ozone and particulate matter, both of which were challenged in the D.C. Circuit Court of Appeals; but, given the importance of its potential health benefits and the uncertainties regarding both the number of areas affected and the means by which areas will reach attainment, implementation of the NAAQS may continue to be of interest to the Congress. An immediate issue is the need for additional funds for monitoring and implementation of the NAAQS. EPA has requested a substantial increase in its FY2011 budget for state and tribal assistance grants, in order to fund both new monitors and the increased state workload involved in implementing the revised NAAQS for lead and other pollutants.

The Administrator of the Environmental Protection Agency (EPA), under a court order to review the National Ambient Air Quality Standard (NAAQS) for lead, announced his decision October 16, 2008, reducing the standard by 90%, from 1.5 micrograms per cubic meter (ug/m3) to 0.15 ug/m3. EPA also promulgated new monitoring requirements at that time, requiring monitors downwind of any source emitting one ton or more of lead per year and in urban areas with populations of 500,000 or more. In January 2009, the Natural Resources Defense Council and three other groups petitioned EPA for a reconsideration of the monitoring requirements. EPA granted the petition and, in December 2009, proposed changes in the monitoring requirements, notably lowering the source-oriented emissions threshold from one ton to 0.50 tons per year. NAAQS are standards for outdoor (ambient) air that are intended to protect public health and welfare from harmful concentrations of pollution. In strengthening the lead standard, the Administrator has concluded that protecting public health and welfare requires much lower concentrations of lead pollution in ambient air than the level previously held to be safe. Lead particles can be inhaled or ingested, and, once in the body, can cause lower IQ and effects on learning, memory, and behavior in children. In adults, lead exposure is linked to increased blood pressure, cardiovascular disease, and decreased kidney function. Regulation of airborne lead is often described as one of the key successes of the Clean Air Act and of the Environmental Protection Agency. In 1970, when lead was widely used as a gasoline additive, emissions of lead nationwide totaled 224,100 tons. Lead was also present then in many consumer products, and thus was emitted to the air from industrial processes and waste incinerators. The phasing out of lead from gasoline, paint, and other products, as well as stricter controls on industrial emissions, reduced lead emissions more than 99%, to 1,300 tons in 2007. The reduction in lead emissions and ambient concentrations led some to suggest that there was no longer a need for an ambient air quality standard for lead. Others, including the Clean Air Scientific Advisory Committee (CASAC), an independent panel of scientists who advise the EPA Administrator, concluded that the old NAAQS (established in 1978) was far too lenient, that lead in ambient air still poses a threat to public health, and that the NAAQS needed to be significantly strengthened. CASAC recommended that the standard be reduced from 1.5 ug/m3 to no higher than 0.2 ug/m3. In promulgating a more stringent NAAQS, the Administrator agreed with the scientists' recommendation, rejecting the argument that the standard is no longer needed. The Administrator's decision followed a multi-year review of the science. To implement the new standard, EPA and the states will first identify nonattainment areas (expected to occur no later than January 2012), following which there will be a 5-10 year-long implementation process in which states and local governments will identify and implement measures to reduce lead in the air. As noted earlier, EPA also promulgated changes to the monitoring requirements for lead as part of the NAAQS decision. As of 2008, at least 24 of the 50 states, including some with major sources of lead emissions, had no lead monitors at all. Under the 2008 regulations, all 101 metropolitan areas with populations greater than 500,000 would be required to have monitors as would the estimated 135 areas that have sources of lead emissions greater than or equal to one ton per year. In December 2009, EPA proposed further changes, lowering the source-oriented emissions threshold from one ton to 0.50 tons per year, while eliminating the urban area monitoring requirement. In place of the latter, lead monitoring would be added to a national network of 80 sites that will monitor multiple pollutants.

The complex humanitarian emergency has emerged as a category of crisis that can be defined in different ways. For example, it can be viewed according to the situation on the ground--scale and intensity of population dislocation, destruction of social networks/community and infrastructure, insecurity of civilians and noncombatants, and human rights abuses; by the complexity of the response needed to address these problems; or by the multi-causal factors that may have contributed to the escalation of conflict in the first place. Beginning in the 1990s, crisis operations increased in war-torn countries and regions throughout the world along with the numbers of those providing relief, primarily humanitarian organizations and international actors. Multinational military forces also served a greater peacekeeping role in these internal wars. The media added a new measure of influence to the response to such crises in the form of greater access and live reporting. Population displacement is often a significant consequence in crises resulting from conflict. This may occur within the affected country or because people flee to countries in close proximity. In these situations the plight of the refugee is one critical element of population movement; the internally displaced person (IDP) is another. The displaced require particular protection, the basis of which may be found in international humanitarian law, and sustained emergency assistance, which is usually provided by U.N. system agencies, governments, international entities, and non-governmental organizations (NGOs). In many protracted civil conflicts, where groups within a country are fighting and in the absence of a political solution, the course agreed on by the international community might be to provide humanitarian assistance to the victims. This assistance may last for many years. Refugees and IDPs may be stranded in camps, urban areas, or informal settlements and separated from their homes for long periods. Conducting a humanitarian operation in an area of conflict often means that access to populations in need and the distribution of emergency relief supplies is hampered by security concerns, not only for those needing assistance but for humanitarian personnel as well. Thus, providing humanitarian and refugee assistance is increasingly complicated and expensive--sources of funding, civil-military relations and operations, human rights concerns, aid worker security, protection, and access are just some of the central issues facing the aid community. The ongoing conflicts in and around Syria and Iraq demonstrate some of these challenges. In addition, natural disasters affect millions of people each year who require prolonged and urgent assistance. The event may be sudden (like the 2010 earthquake in Haiti, the 2013 typhoon in the Philippines, or the 2014 earthquake in Nepal) or protracted (like drought conditions in the Horn of Africa and southern Africa, food insecurity in the Sahel, and the possible long-term effects of climate change). Responses to natural disasters are typically multilateral and less likely to be hindered by the politics at hand, although the situation in Burma following the May 2008 cyclone demonstrated the opposite. The United States is a major contributor to relief efforts in international crises and disaster situations. Key relief-related policy issues likely to be of concern in the 114 th Congress include budget priorities, levels of funding, sources of other support available worldwide, and the ways in which operational assistance is delivered. Congress has consistently supported humanitarian efforts as a means of responding to natural disasters (such as floods and earthquakes) and man-made crises (such as war) in the short term, mitigating humanitarian impacts, and promoting a U.S. presence. From FY2008 to FY2012, the U.S. government contributed more than $4 billion annually to disaster relief worldwide. In FY2013, the U.S. contribution was more than $5.6 billion, and in FY2014 this number rose to $6.4 billion. The recent increases largely reflect humanitarian needs related to the crisis in Syria. Humanitarian assistance generally receives strong bipartisan congressional support. Congress has given the President broad authority in this area. The Foreign Assistance Act of 1961 (P.L. 87-195), as amended, authorizes the United States to participate in disaster relief efforts and gives the President great flexibility to respond to disasters with a wide range of government-funded humanitarian assistance. In 1993, President Clinton designated for the first time the Administrator of the U.S. Agency for International Development (USAID) as the Special Coordinator for International Disaster Assistance. In this capacity the Administrator coordinates the U.S. government's response to both natural and man-made disasters. The Administrator also calls upon federal agencies to provide assistance; contracts with and funds private voluntary agencies to provide humanitarian assistance; and coordinates the U.S. response with that of other countries. The very nature of humanitarian emergencies--the need to respond quickly in order to save lives and provide relief--has resulted in a broad definition of humanitarian assistance, on both a policy and operational level. While humanitarian assistance is assumed to address urgent food, shelter, and medical needs, the agencies within the U.S. government providing this support expand or contract the definition in response to circumstances. The legislation governing humanitarian or disaster assistance leaves the decision on the type of assistance required to the President. U.S. humanitarian assistance in disasters and international crises is broad and far-reaching: it covers many elements directly concerned with the provision of relief and strategies for strengthening how people survive over time. Congress broadly defines humanitarian activities in an effort to enable the U.S. response to be as flexible as possible to adapt to humanitarian needs. In practice, the provision of humanitarian assistance is typically case and time specific. In general, humanitarian assistance is exempt from the regulations implementing various types of foreign aid sanctions. The Foreign Assistance Act of 1961, as amended (P.L. 87-195), allows the President to provide disaster assistance, "notwithstanding any other provision of this or any other Act," which would otherwise prohibit or restrict aid to selected countries. For example, a country may generally receive humanitarian assistance even in instances when other types of aid are prohibited because of a coup, default in debts, non-compliance with international treaty obligations, or the many other situations that can trigger restrictions on foreign assistance. Categories of humanitarian assistance can be broken down into several main elements including relief and rehabilitation, food assistance, refugee programs, and logistical and operational support. USAID, the State Department, and the Department of Defense provide humanitarian assistance and cover a mix of these activities as described below. USAID is the central U.S. agency charged with coordinating U.S. government and private sector foreign assistance. The Office of Foreign Disaster Assistance (OFDA), within USAID's Bureau for Democracy, Conflict, and Humanitarian Assistance (DCHA), provides non-food humanitarian assistance during international crises and disasters and can respond immediately with relief materials and personnel, many of whom are often already in the field. OFDA was established in 1964 to coordinate U.S. government emergency assistance in what had previously been an ad hoc U.S. response to international disasters. OFDA provides some assistance through its own personnel, but the bulk of its activities are carried out through grants to United Nations (U.N.) agencies, other international organizations (IOs), international governmental and non-governmental organizations (NGOs), and private or religious voluntary organizations (PVOs). OFDA also coordinates with the U.S. embassy or USAID mission in the affected country, the government of the country suffering the disaster, and other governments. Funding for USAID/OFDA is authorized and appropriated in annual Foreign Operations legislation. A response to a disaster generally begins with the U.S. ambassador or chief of mission responding to a request from the affected country's government for assistance. OFDA has use of up to $50,000 (through Disaster Assistance Authority) immediately available, which it releases to the USAID mission or U.S. embassy, generally within 24 hours. This money is then provided to the local Red Cross/Red Crescent or a similar local disaster response organization, or it may be used to buy relief supplies or hire personnel locally. The United States also begins working with the affected government through the ambassador to determine what, if any, additional aid may be needed. USAID/OFDA can respond immediately with cash, relief materials, and personnel to any kind of disaster, whether man-made or natural. The President has the authority to set the terms and conditions of the aid provided. As a general rule, assistance provided by USAID/OFDA lasts about 90 days, although the agency may continue monitoring and mitigation projects for a longer period. Some USAID/OFDA personnel are located in various countries around the world and can move quickly to a disaster area. OFDA also has Disaster Assistance Response Teams (DARTs), groups of experts that can be brought together quickly to respond to different types of disasters. These groups may be sent to the area in anticipation of a disaster, such as a tropical storm or flood that has been predicted by the weather service. Once a DART is deployed, a Washington, DC-based Response Management Team (RMT) is also activated. Under the legislation governing disaster assistance, the President is authorized to borrow up to $50 million in any fiscal year from any other economic assistance account if funding within the USAID/OFDA budget is inadequate. Generally, this money is borrowed from programs already planned for countries within the region. These borrowed funds may be repaid through passage by Congress of a supplemental appropriation. USAID regional bureaus may also reprogram their projects within the disaster region in response to local needs, or they may transfer funds to USAID/OFDA to carry out disaster related programs. USAID/OFDA can also request the use of facilities, equipment, or personnel from other agencies as needed. For example, U.S. weather prediction facilities and satellites may be used to track storms, droughts, or floods. Centers for Disease Control and Prevention specialists are relied upon for identifying and responding to outbreaks of disease. The Food for Peace Act (FFPA), often referred to as P.L. 480, is the main legislative vehicle that authorizes foreign food assistance. Funding for FFPA programs is authorized in annual Agriculture appropriations bills. One of the components of FFPA is Title II, Emergency and Private Assistance, which provides for the donation of U.S. agricultural commodities to meet emergency and nonemergency food needs in foreign countries. Title II provides food as grant aid that does not need to be repaid and is the primary disaster aid channel for U.S. food aid. Title II is administered by USAID. The legislation gives the USAID Administrator wide authority to provide food aid and contains a "notwithstanding clause" that allows food aid to be provided despite prohibitions in other legislation. Commodities may be made available for direct distribution to the needy, or for sale, barter, or other disposition, according to the determination of the Administrator. The United States is by far the largest international contributor of emergency food aid in disaster situations. In recent years, most emergency food aid has been provided to victims of complex humanitarian emergencies, helping people displaced by warfare and unable to grow or obtain food in their traditional way. Crisis conditions often last many years. Food aid programs generally target the most vulnerable populations, including children, pregnant and nursing mothers, the elderly, sick and handicapped, and those identified as malnourished. Title II grant food aid is mostly provided for humanitarian relief but may also be used for development-oriented purposes through governments, intergovernmental entities, PVOs, and multilateral organizations, such as the U.N. World Food Program (WFP). As with other USAID/OFDA aid, food aid may be prepositioned in regions that are vulnerable to disaster, or diverted from a less pressing food aid program in a nearby country that would be replenished later. Food aid that is not prepositioned or diverted from nearby countries may take several months to reach a disaster site. Fifty percent of U.S. food aid tonnage must be shipped on U.S. flagged vessels. Development professionals have long raised concerns about the efficiency and effectiveness of U.S. food assistance. In the FY2014 budget, the Administration proposed changes in U.S. food aid programs that would substantially alter the way in which the United States provides international food assistance. In the FY2014 appropriations legislation, Congress did not adopt the proposed reforms to food aid programs. In addition to the Food for Peace program, Section 416 (b) of the Agricultural Act of 1949 provides for the donation of surplus U.S. agricultural commodities held by the Commodity Credit Corporation to needy countries, including those suffering from disasters. This program is managed by the Department of Agriculture. The Office of Civilian-Military Cooperation (CMC), which operates within USAID's Bureau for Democracy, Conflict, and Humanitarian Assistance (DCHA), was established in November 2011. Previously named the Office of Military Affairs (OMA), CMC is an operational link established to improve USAID's coordination of humanitarian assistance with the U.S. military. It works to align defense and development policies, plans, and programs to leverage the capabilities of each agency to achieve better development outcomes. Senior USAID staff are assigned to the five geographic Combatant Commands and help assess development needs. Joint exercises with the military are ongoing training in preparation for future disasters. Training for both the military's civil affairs officers and USAID workers is also intended to increase knowledge and cooperation, and capacity at the operational level. The OMA is also a contact point between NGOs and the military, and allows each to benefit from the other's operational experience while at the same time contributing to the administration and delivery of humanitarian assistance. The Office of Transition Initiatives (OTI) provides post-disaster transition assistance, which includes mainly short-term peace and democratization projects with some attention to humanitarian elements (e.g., community projects such as housing, electricity, water) but not emergency relief. OTI funding is often provided during the early recovery phase of a humanitarian emergency or disaster. Additionally, the Office of Conflict Management and Mitigation (CMM) provides transition assistance towards development through early intervention in the causes and consequences of conflict. There are three funds managed by USAID that can be used for disaster assistance and that are focused on specific issues--Displaced Children and Orphans Fund (DCOF), the Leahy War Victims Fund (LWVF), and the Victims of Torture Fund (VOT). They are coordinated by DCHA through funds reserved by Congress each year. The Bureau of Population, Refugees and Migration (PRM) deals with problems of refugees worldwide, conflict victims, and populations of concern to the U.N. High Commissioner for Refugees (UNHCR), often including internally displaced persons (IDPs). Humanitarian assistance includes a range of services from basic needs to community services to tolerance building and dialogue initiatives. Key issues addressed by PRM include protection (refugees, asylum issues, identification, returns, tracing activities) and quick impact, small community projects. Refugee funds are provided as cash grants to international governmental and NGO refugee organizations. These include U.N. agencies such as UNHCR and the U.N. Children's Fund (UNICEF), and international organizations such as the International Committee of the Red Cross (ICRC). The Emergency Refugee and Migration Assistance Fund (ERMA) is a contingency fund that remains available until spent and is replenished as needed by Congress. P.L. 103-236 sets the maximum amount of money that can be in this account at $100 million, although appropriations have been made that exceed this amount. Established in 1962, ERMA gives the President wide latitude in responding to refugee emergencies. Refugees are defined as those fleeing their homeland due to persecution on account of their religion, race, political opinion, or social or ethnic group. The law contains a "notwithstanding clause" that waives prohibitions against providing aid contained in any other legislation. The legislation establishing ERMA places certain requirements on the President. The President must publish a Presidential Determination in the Federal Register and keep the appropriate congressional committees informed of drawdowns. Refugee emergencies lasting more than a year are incorporated into the regular budget of the Migration and Refugee Assistance (MRA) account through PRM. Both ERMA and MRA are authorized in Department of State legislation and appropriated in Foreign Operations legislation. The Department of Defense (DOD) provides support to stabilize emergency situations, including the transport and provision of food, shelter and supplies, logistical support, search and rescue, medical evacuations, and refugee assistance. This includes the provision of 2,300 calorie low-cost humanitarian daily rations to alleviate hunger after foreign disasters. The incremental costs for all DOD humanitarian assistance for both natural and man-made disasters are funded through the Overseas Humanitarian, Disaster, and Civic Action (OHDACA) account in annual DOD appropriations. The Defense Security Cooperation Agency (DSCA) is the central DOD agency that synchronizes global security cooperation programs, funding, and efforts across the Office of the Secretary of Defense (OSD), Joint Staff, State Department, Combatant Commands, the services, and U.S. civilian industry. Under DSCA oversight, the Office of Humanitarian Assistance, Disaster Relief and Mine Action (HDM) manages DOD humanitarian assistance programs funded with OHDACA appropriations in all Geographic Combatant Commands. This includes humanitarian projects, transportation of DOD and privately donated humanitarian material, humanitarian mine action programs, and foreign disaster relief. DOD provides assistance in humanitarian emergencies under several provisions in law. The primary authority is found in Section 2561 (formerly Section 2551) of Title 10, U.S. Code, which allows the use of appropriated funds "for the purpose of providing transportation of humanitarian relief and for other humanitarian purposes worldwide." The Secretary of State determines when this provision should be used and requests DOD to respond to a disaster with specific assistance such as helicopter transport, provision of temporary water supplies, or road and bridge repair. DOD response time depends upon what is being requested and how long it takes to get personnel and equipment to the site of the emergency. If possible, military personnel join USAID's OFDA assessment team to help determine the type of aid that can be provided by DOD. Under this provision, DOD generally limits its service activities to those that stabilize the emergency situation, such as road or bridge repair, but generally does not undertake projects that include rebuilding. The law requires an annual report to Congress on the use of funds. Title 10 also contains a section that helps private voluntary agencies transport donated humanitarian goods to disaster sites. Section 402, the Denton program, named after former Member of Congress Jeremiah Denton, authorizes shipment of privately donated humanitarian goods on U.S. military aircraft on a space-available basis. The donated goods must be certified as appropriate for the disaster by USAID's OFDA and can be bumped from the transport if other U.S. government aid must be transported. Donated goods can also be shipped on commercial vessels, using Section 2561 funds. Section 506 (a) (1) of the Foreign Assistance Act of 1961 allows the drawdown of military equipment to a limit of $100 million in any fiscal year if the President determines that an unforeseen emergency exists that requires immediate military assistance and the requirement cannot be met under any other provision. Before this provision can be used the President must notify the Speaker of the House and the Senate Foreign Relations Committee in writing by issuing a Presidential Directive explaining and justifying the need for the equipment being used. This request is handled by the Department of State and the National Security Council. Although its primary purpose is not focused on disaster and emergency response activities, another subset of DOD Humanitarian Assistance, known as Humanitarian and Civic Assistance (HCA) activities, is authorized under Section 401 of Title 10, U.S. Code. Under regulations prescribed by the Secretary of Defense, humanitarian and civic assistance activities are authorized in conjunction with authorized military operations of the Armed Forces in a country if it is determined that the activities would (1) promote the security interests of both the United States and the country in which the activities are to be carried out, and (2) promote the specific operational readiness skills of the members of the Armed Forces who participate in the activity. HCA activities under Title 10 U.S.C. Section 401 authority are separate from HA programs managed by DSCA and placed under direct oversight of Secretary of Defense. Congress plays a key role in funding U.S. humanitarian assistance. The global humanitarian accounts (MRA, ERMA, IDA, and P.L. 480) have generally been approved by Congress at the requested level. At times, however, the amount of disaster assistance provided during a fiscal year exceeds the amount appropriated by Congress. Congress has provided the President with the authority to borrow up to $50 million from economic assistance accounts in the foreign aid program. In some cases, particularly when disasters occur during the appropriations process, congressional amendments reimbursing a particular agency for a specific disaster may become part of the next year's appropriation for that agency. Congress is also generally supportive of supplemental appropriations that reimburse agencies for their expenditures, either to replenish the emergency accounts or other accounts that have been used to provide assistance. When there is difficulty in passing supplemental legislation, the debate is generally over non-disaster items, such as long-term reconstruction aid for the devastated area, or non-germane amendments added to the legislation rather than opposition to disaster assistance funding itself. Humanitarian assistance is intended to save lives and meet basic human needs in the wake of natural disasters and conflicts. Humanitarian assistance funding appropriated through State, Foreign Operations, and Related Programs from FY2008 through FY2015 is provided by account and year in the table and graph below. In FY2014, funding for the IDA and MRA accounts increased by approximately 15% each from FY2013. This enabled some carryover to meet urgent needs in FY2015. Three main issues impact or potentially impact levels of funding: The increasing number of humanitarian crises that require U.S. support . The United States remains a major contributor to relief efforts in international crises and disaster situations. The number of humanitarian crises due to conflict or natural disasters remains high, and the funding data for U.S. humanitarian assistance reflects a steady increase in support to meet humanitarian needs worldwide reaching nearly $6.4 billion in FY2014. Humanitarian assistance has increased as a portion of the foreign operations budget since FY2013, mainly as a result of Level 3 (L3) crises (the U.N. classification for the most severe, large-scale humanitarian crises), which currently include Syria, South Sudan, and Iraq. Use of funds designated as Overseas Contingency Operations (OCO) . Beginning in FY2012, Congress designated a portion of foreign assistance funds as OCO. The designation is intended to identify extraordinary and temporary costs that should not be considered part of an agency's base budget, and do not count toward annual budget caps. In some ways, the OCO designation has replaced the use of supplemental funds that were common for funding humanitarian assistance prior to FY2011. Food aid reform. The Obama Administration's FY2014 budget request proposed food aid that would have substantially altered both the funding stream and implementation practices of U.S. food assistance. The request proposed shifting some funding for the Food for Peace programs, currently funded through the Agriculture appropriations subcommittee, into humanitarian assistance accounts, funded through State-Foreign Operations appropriations. Although Congress did not adopt the proposed reforms to food aid programs in the FY2014 appropriations legislation, food aid reform remains an issue that may well resurface. The Administration's FY2016 budget request for global humanitarian accounts totals $5.6 billion. The request includes $1.74 billion for IDA, of which $931 million is for the core IDA account ($690 million is for OFDA and $241 million is for emergency food assistance) and $810 million is for IDA-OCO to address the humanitarian impact of the crises in Syria and Iraq (including $325 million for OFDA and $485 million for emergency food assistance). A significant portion of the IDA-OCO funding will support neighboring countries hosting refugees from Syria and Iraq, including Jordan and Lebanon. The budget request asks for $2.45 billion for MRA, of which $1.63 billion will fund contributions to key international humanitarian organizations and NGO partners to address pressing humanitarian needs overseas and to resettle refugees in the United States, and $819 million will be for MRA-OCO for humanitarian needs related to Syrian and Iraqi displacement. The request also includes $50 million for ERMA to enable the President to provide humanitarian assistance for unexpected and urgent refugee and migration needs worldwide, and $1.4 billion for the Food for Peace program. The United States responds with varying amounts of relief and recovery assistance, typically in coordination with its international partners. The sheer number of players in the field, representing a range of actors and interests, creates a complicated coordination challenge and often contributes to duplication of efforts or competition over the same sources of money and projects. Those involved may include, for example, numerous U.N. agencies, other international organizations (IOs), bilateral and multilateral donors, and non-governmental organizations (NGOs). International actors provide relief either through financial contributions to the government of the affected country or to NGOs, or by directly providing in-kind support in the form of relief supplies and emergency personnel. Local, regional, and national authorities may also have a role in the provision of assistance, law enforcement, and access control. It is important to note that local aid organizations may be critical because they often know the terrain, the available resources, and the community, whereas the international community may bring to bear greater resources and coordinating capacity. Relief operations are often daunting in terms of the demands of those in need--from life-saving action required to the provision of food and shelter under harsh physical conditions. In addition, the humanitarian response system has many moving parts. The United Nations works with a wide number and variety of aid organizations and donors. Within the U.N. system, in addition to the Office for the Coordination of Humanitarian Affairs (OCHA), the World Food Program (WFP), the World Health Organization (WHO), the U.N. Children's Fund (UNICEF), the U.N. High Commissioner for Refugees (UNHCR), and the U.N. Development Program (UNDP) all contribute to efforts to respond to a crisis. OCHA also coordinates with IOs such as the International Committee of the Red Cross (ICRC) and the International Organization for Migration (IOM), and a wide range of NGOs, many of which are implementing partners and provide much of the operational support on the ground. In addition, other internationals--governments, militaries, intergovernmental entities such as the European Union--are often part of the response network. A key determinant in the response to humanitarian emergencies is level of prior planning, including the identification of responders--local, national, or international--and their level of preparedness. Furthermore, it is widely recognized that in many crises, it is the people who are least able to help themselves--those who are poor and those who have few, if any, options to live elsewhere--who are most affected. Experts continue to emphasize the importance of drawing on lessons learned from responses to previous crises and disasters. Some of the ongoing challenges include communication between the government, aid agencies, and the public; coordination among emergency responders; civil-military cooperation and division of duties; and the planning and logistics involved in providing aid to less accessible, often more insecure, areas. Members of the 114 th Congress may take the following issues into account when considering U.S. humanitarian assistance activities worldwide. Finding the resources to sustain U.S. funding or pledges to humanitarian crises may be difficult in light of domestic budget constraints. When disasters require immediate emergency relief, the Administration may fund pledges by depleting most global humanitarian accounts. In order to respond to future humanitarian crises, however, these resources would need to be replenished. If not replenished, U.S. capacity to respond to other emergencies could be affected. In recent years, the United States has moved away from annual supplemental funding to replenish humanitarian or other accounts. Instead, it has increased levels of funding during the regular appropriations process. While Congress may be reluctant to allocate funds for disasters before they happen, some experts have argued there are negative impacts of relying too heavily on post-disaster supplemental funding. For example, budget uncertainty may result in program cuts, delays in decision making, and disruptions in service. Humanitarian programs may incur greater expense in restarting activities that had to be cut back due to insufficient funding earlier in the year. This in turn may raise questions about the credibility and reliability of the United States as a partner in the provision of humanitarian assistance. Congress has an interest in the cost and effectiveness of foreign affairs activities, including humanitarian assistance, that promote U.S. interests overseas. Both Congress and the Administration encourage other countries to provide disaster assistance and to turn pledges into actual commitments. Often it is not easy to measure the precise contributions made by various countries and organizations, or to compare them to U.S. assistance. It is not always evident whether figures listing donor amounts represent pledges of support or more specific obligations. Pledges made by governments do not always result in actual contributions. Some offers of assistance are not accepted for various reasons. It also cannot be assumed that the funds committed to relief actually represent new contributions, since the money may previously have been allocated elsewhere. Moreover, it is not readily apparent how the actual cost of the humanitarian emergency might be shared among international donors. Comparing U.S. and international aid is also difficult because of the often dramatically different forms the assistance takes (relief items versus cash, for instance). Given the protracted nature of many modern crises, some donors face "donor fatigue." or a reluctance to continue providing funds for a seemingly endless need. Some Members of Congress may feel that the U.S. provides a disproportionate share of assistance in some situations and should step back to let others play a larger role. Other Members may believe that the United States has an obligation to lead such efforts, or see a foreign policy benefit for doing so. Finding a balance between burdensharing on the one hand and an effective U.S. response on the other can negatively impact relief operations during emergencies when immediate funds are required for a response and are not forthcoming. Some experts are concerned about funding priorities and the ongoing need for resources for other disaster areas. Some Members of Congress have raised concerns about transparency of donor contributions, allocation of monies, and monitoring of assistance projects. For example, the United Nations continues to address concerns about its financial tracking and reporting system. In responding to international disasters, many contributions are also made directly to IOs and NGOs, which could raise the same questions about transparency requirements. Moreover, while conditions and time limits have been proposed by Congress as a means of ensuring greater accountability, they can also add pressure for organizations to spend contributed funds quickly, sometimes leading to unnecessary spending, waste, and duplicated efforts. Many also argue that restrictions on use of funds often do not allow flexibility to adapt projects to better meet the changing needs on the ground. Since the 1990s, limitations on the operating environment of humanitarian agencies have been a topic of intense debate and discussion. A number of reports have highlighted increased incidences of insecurity and attacks on humanitarian staff. While a more consistent and expanded response by the international community to humanitarian crises over the past two decades has meant that a greater number of aid workers are operating in crisis areas, most security incidents tend to be concentrated in a limited number of high-profile contexts. At the same time, other reports indicate that the ability of aid workers to access populations at risk has decreased over time. This could in part be due to operations taking place in a greater number of conflict areas, but other factors may include the actions of multiple non-state actors or the role of sovereign governments in denying access. Furthermore, some experts stress that humanitarian agencies need to be able to operate independently of external military and political agendas but may not be able to do so. One reason that humanitarian workers may be less secure than in the past is that they are often not viewed as neutral. For example, some contend that, increasingly, the lines are blurred between humanitarian and other actors, such as the military, in the delivery of humanitarian assistance, the inclusion of humanitarian response in counter-insurgency operations, and the incorporation of humanitarian action within integrated U.N. missions. Adherence to international humanitarian law and the traditional humanitarian principles of impartiality, neutrality, and independence are often cited as the underpinnings of the provision of humanitarian assistance, but their application may vary by organization mandate and situation. The security of the environment in which humanitarian organizations are operating is complicated not only by the specific crisis itself, but the ways in which humanitarian actors define their roles and responsibilities. A growing number of humanitarian workers have been put at great risk or lost their lives in providing humanitarian assistance. The degree to which a security force protects humanitarian relief workers and parties to the conflict will have some bearing on who is in charge, the security measures taken and provided, and the perception of whether the humanitarian community has taken sides in the conflict. Security and access are serious concerns and remain key priorities within the humanitarian community. The provision of humanitarian assistance raises the potential for unexpected consequences. First, it is important to examine whether humanitarian assistance is going to those for whom it is intended. Evaluating and tracking provision of supplies is difficult during a conflict and impossible to completely control. Second, there is the role of the NGO, including its mission and sources of funding, in what has become a major independent enterprise in conflict areas. There is the potential for misuse, intended or unintended, which may require closer analysis of the performance of providers. Third, there is the question raised by some experts as to whether the provision of humanitarian assistance is helpful--particularly in cases where there is no consensus on how or when to intervene but only on the need to demonstrate action. Some question whether humanitarian assistance in some instances actually prolongs conflict. A related issue concerns an interest on the part of many Members of Congress in the labeling or "branding" of U.S. humanitarian aid delivered to areas of conflict so that recipients are aware of its origin. The U.S. government tries to balance the desire to maintain visibility as a contributor of humanitarian assistance with concerns for the security of aid recipients and implementing partners who could become possible targets of attacks. Finding appropriate ways for the United States to leverage its political objectives without politicizing humanitarian aid remains a significant challenge. There has been some debate about whether the United States receives adequate political benefit from its humanitarian assistance efforts and whether those who receive assistance remain unaware of its origins, or assume it is from a foreign government other than the United States. Syria is a case in point where some Members of Congress and observers have argued that the United States should begin to more aggressively brand U.S. aid to enhance local perceptions that the people of the United States stand in solidarity with Syrians. Humanitarian groups argue that strategic objectives such as winning hearts and minds potentially compromise the neutrality of humanitarian assistance in general. Others contend that a targeted attack on a U.S.-labeled humanitarian organization could jeopardize broader humanitarian efforts and perhaps funding. It is often unclear whether raising awareness of U.S. humanitarian assistance would do much to change local perceptions in conflict areas. More broadly, political considerations play a role in the way assistance is given and to whom. While the images of human suffering portrayed by the media only reinforce the need to do something, humanitarian assistance carries some weight as an instrument of "neutral" intervention in crises and is the most flexible policy tool that can be quickly brought to bear in a crisis. It can buy time and keep options open, and it may be an avenue to achieve minimal consensus on an international response. Sometimes humanitarian assistance can also expand beyond its immediate function. It may provide the means to maintain some form of contact with a country/region, or mitigate tensions over policy towards a region within the U.S. government or with and among its allies. Sometimes humanitarian assistance is expanded beyond its immediate function to avert a crisis, to provide support to allies, and to maintain a presence in the region. How it is used and whether it becomes more of a strategic, policy tool depends upon the situation, what other governments are doing, and the degree to which the United States has further interest in the region. Providing humanitarian assistance also raises questions about implications for future action. On the one hand, if the United States decides to reduce its humanitarian support, would this diminish U.S. standing among its allies or affect its interests in other ways? On the other hand, since the President has a great deal of flexibility over U.S. involvement, once commitment to a humanitarian effort is made, does this make the long-term U.S. participation in reconstruction and political solutions more likely? Regardless, it is clear that as crises proliferate, the level and sources of U.S. humanitarian assistance will inevitably have an important impact not only on the relief operation itself, but on broader foreign policy goals.

The majority of humanitarian emergencies worldwide stem from natural disasters or from conflicts. Congress has consistently supported humanitarian efforts as a means of saving lives, promoting stability, and furthering U.S. foreign policy objectives. Intervention results in varying amounts of relief and recovery assistance and can have an important impact not only on the relief operation itself but on broader foreign policy issues. In the 114th Congress, international humanitarian and refugee assistance is expected to continue to have a strong measure of bipartisan interest, with key policy issues focused on budget priorities, levels and types of funding, the sources of other support available worldwide, and the ways in which operational assistance is delivered. Factors that may impact decision-making include the type of humanitarian assistance required, the impact of conflict and refugee flows on stability in the region in question, and the role of neighboring countries in contributing to the relief effort. Examples of issues likely to remain of congressional interest include competing aid and budget priorities, reimbursing U.S. government agencies for their expenditures (to replenish the emergency accounts or other accounts that have been used to provide assistance), and civilian and military coordination, including the evolving role of the Department of Defense in humanitarian assistance. Other priorities may include an examination of the disparity between numbers of internally displaced persons and refugees worldwide and the available funding for these groups; physical access to and protection of refugees and other vulnerable populations in addition to the protection of human rights; programs to address gender based violence; and the creation of durable solutions for displaced populations. The President can provide emergency humanitarian assistance through several sources whose funding is authorized and appropriated by Congress. These are funds currently appropriated to the U.S. Agency for International Development's (USAID's) Office of Foreign Disaster Assistance (OFDA) through the International Disaster and Famine Assistance (IDA) account; U.S. Department of Agriculture food aid programs under Title II of the Food for Peace Act; the State Department's Bureau of Population, Refugees, and Migration (PRM) through the Migration and Refugee Assistance (MRA) and the U.S. Emergency Refugee and Migration Assistance Fund (ERMA) accounts; and funds appropriated to the Department of Defense, Overseas Humanitarian and Disaster and Civic Aid (OHDACA) account. In addition, the President has the authority to draw down defense equipment and direct military personnel to respond to disasters and provide space-available transportation on military aircraft and ships to private donors who wish to transport humanitarian goods and equipment in response to a disaster. Finally, the President can request other government agencies to assist within their capabilities. In FY2015, estimated funding for global humanitarian accounts is $6.4 billion. The Administration's FY2016 budget request for global humanitarian accounts is $5.6 billion, but the decrease assumes carryover balances from FY2015 will be available to meet projected needs for humanitarian responses. This report examines U.S. humanitarian assistance in international crises and disaster situations. It considers the sources and types of U.S. government aid, the response mechanisms of key U.S. agencies and departments, and possible issues for Congress--including competing aid and budget priorities, burdensharing and donor-fatigue, the transparency and efficacy of U.S. humanitarian assistance, consequences of such assistance, and potential links to broader U.S. foreign policy goals. This report will be updated as events warrant.

In a criminal law context, bail is most often thought of as the posting of security to ensure the presence of an accused at subsequent judicial proceedings--that is, "to obtain the release of (oneself or another) by providing security for future appearance." The term itself is less frequently used now, however, due in part to the practice of release on personal recognizance, which consists of permitting an individual to pledge his word, rather than his property, for his future appearance. Moreover, today, an individual's release pending subsequent criminal proceedings is often predicated on conditions other than, or in addition to, the posting of an appearance bond, secured or unsecured. As a consequence, rather than speaking of bail, existing federal law refers to release or detention pending trial, to release or detention pending sentencing or appeal, and to release or detention of a material witness. This is an overview of federal law in each of these areas, as well as in the area of extradition from the United States to another country. An individual released prior to trial remains free under the same conditions throughout the trial until conviction or acquittal, subject to modification or revocation by the court. For that reason, the term pretrial release is understood to include all pre-conviction release, both before and during trial. Under existing federal law, an individual arrested under federal authority must be brought before a magistrate or judge without unnecessary delay. Any federal or state judge or federal or state magistrate may qualify. The magistrate judge may order an individual accused of a federal crime either released or detained prior to trial and conviction. The law affords the judge or magistrate four options, which it places in descending order of preference. First, he may release the accused on personal recognizance or under an unsecured appearance bond, subject only to the condition that the accused commit no subsequent federal, state, or local crime and that he submit a sample for DNA analysis. Second, he may release the accused subject to certain additional conditions. Third, he may order the accused detained for bail revocation, parole revocation, probation revocation, or deportation proceedings. Fourth, he may order the accused detained prior to trial. If the magistrate or judge does not initially release the accused on personal recognizance or conditions, a hearing on the release of the accused must be held "immediately" upon the individual's first appearance before the judge or magistrate. The accused or the government may request that the hearing be postponed for up to five days--up to only three days when the postponement is granted at the government's behest. The accused is entitled to assistance of counsel at the hearing and to the appointment of counsel if necessary. The accused may testify at the hearing and present and cross-examine witnesses. Evidence may be introduced at the hearing without deference to the rules that apply at a criminal trial. The decision to release an accused on personal recognizance or unsecured appearance bond rests upon a determination that the accused poses no risk of flight and no risk of danger to the community or any of its inhabitants. The decision requires consideration of four factors: (1) "the nature and circumstances of the offense ... ; (2) the weight of the evidence against the person; (3) the history and characteristics of the person ... ; and (4) the nature and seriousness of the danger to any person or the community that would be posed by the person's release..." If the judge or magistrate concludes that personal recognizance or an unsecured appearance bond is insufficient to overcome the risk of flight or to community or individual safety, he may condition the individual's release on a refrain from criminal activity, collection of a DNA sample, and the least restrictive combination of 14 conditions. Under the appropriate circumstances, the "community" whose safety is the focus of the judge's or magistrate's inquiry need not be limited geographically to either the district or even the United States. The 14 statutory conditions are third-party supervision; seeking or maintaining employment; meeting education requirements; observing residency, travel, or associational restrictions;* avoiding contact with victims or witnesses;* maintaining regular reporting requirements;* obeying a curfew;* adhering to firearms limitations;* avoiding alcohol or controlled-substance abuse; undergoing medical treatment; entering into a personally secured appearance agreement; executing a bail bond; submitting to afterhours incarceration; and complying with any other court-imposed condition. Section 3142 requires the judge or magistrate to impose electronic monitoring and several of these conditions (noted with an asterisk above) when the accused is ineligible for release on personal recognizance or an unsecured bond and is charged with one of several sex-related offenses against children. Several defendants have successfully challenged this mandatory requirement on Due Process Clause or Excessive Bail Clause grounds. Notwithstanding the explicit conditions that seem to contemplate requiring an accused to post security for his release or face detention, Section 3142 provides that "the judicial officer may not impose a financial condition that results in the pretrial detention of the person." The courts have resolved the apparent conflict by essentially construing the provision to apply when the financial condition is not calculated to result in pretrial detention but is a collateral consequence of the court's determination of the amount necessary for safety and to prevent flight. As the Ninth Circuit explained: Several other circuits have addressed the apparent violation of SS3142(c)(2) that arises when, as in Fidler's case, a defendant is granted pretrial bail, but is unable to comply with a financial condition, resulting in his detention. It may appear that detention in such circumstances always contravenes the statute. We agree, however, with our sister circuits that have concluded that this is not so. These cases establish that the de facto detention of a defendant under these circumstances does not violate SS3142(c)(2) if the record shows that the detention is not based solely on the defendant's inability to meet the financial condition, but rather on the district court's determination that the amount of the bond is necessary to reasonably assure the defendant's attendance at trial or the safety of the community. This is because, under those circumstances, the defendant's detention is not because he cannot raise the money, but because without the money, the risk of flight [or danger to others] is too great. The accused, however, may have to overcome the statutory rebuttable presumption of flight or dangerousness to secure his release on personal recognizance or an unsecured appearance bond. A rebuttable presumption attaches under either of two circumstances. The first occurs when, following a hearing, the judge finds probable cause to believe that the accused has committed one of the serious crimes classified as either (1) a 10-year drug offense; (2) an offense involving possession of a firearm in furtherance of a crime of violence or serious drug offense; (3) a 10-year federal crime of terrorism; (4) a 20-year human trafficking offense; or (5) a designated sex offense committed against a child. The second set of circumstances giving rise to a rebuttable presumption occurs when, following a hearing, the judge finds probable cause to believe that the accused previously committed a qualifying offense, much like those just described, while on bail, and for which he was convicted or released from imprisonment within the last five years. "[T]he presumption reflects Congress' substantive judgment that particular classes of offenders should ordinarily be detained prior to trial." An accused must present some rebuttal evidence, no matter how slight, in order to the escape the presumption. Nevertheless, the prosecution bears the ultimate burden of establishing that no series of conditions is sufficient to negate the risk of the accused's flight or dangerousness--by a preponderance of the evidence in the case of flight and by clear and convincing evidence in the case of dangerousness. Unless he holds the accused for revocation or deportation proceedings, the judge or magistrate may decline to release the accused on conditions only if he finds that no condition or series of conditions will provide reasonable assurance against flight or dangerousness. The third option available to the judge or magistrate if the accused poses a flight or safety risk is to order him detained for up to 10 days to allow for a transfer of custody for purposes of bail, probation or parole, or deportation revocation proceedings. Otherwise applicable bail provisions come into play if the accused has not been transferred within the 10-day deadline. Finally, having exhausted the other options--release of personal recognizance, release under conditions, and release for other proceedings--the judge or magistrate may order the accused detained prior to trial. Although pretrial detention is the least statutorily favored alternative in the federal pretrial bail scheme, 72.7% of those accused of federal crimes and presented to a federal judge or magistrate are detained prior to trial. The judge or magistrate may order pretrial detention upon determining, after a hearing, that no combination of conditions will be sufficient to protect against the risk of flight or threat to safety. The government has the option of petitioning for pretrial detention under two circumstances. The first consists of instances in which the accused is charged with one or more designated serious federal offenses, that themselves create a rebuttable presumption that no set of conditions will guarantee public safety or prevent the flight of the accused. The second consists of instances in which the defendant poses a serious safety or flight risk, regardless of the crime with which he is charged. Offense- D riven D etention . The government may seek pretrial detention when the accused is charged with any of nine categories of federal crime: (1) crimes of violence; (2) sex trafficking involving a child or the use of force, fraud, or coercion; (3) federal crimes of terrorism with a maximum term of imprisonment of 10 years or more; (4) offenses punishable by death or one punishable by life imprisonment; (5) controlled-substance offenses with a maximum term of imprisonment of 10 years or more; (6) felonies, if the accused has previously been convicted of two or more of such crimes of violence, crimes of terrorism, capital offenses, controlled substance violations, or their equivalents under state law; (7) nonviolent felonies committed against a child; (8) felonies involving the use of firearms, explosives, or other dangerous weapons; and (9) failure to register as a sex offender. The categories obviously overlap and reinforce each other. For example, many of the federal crimes of terrorism are also crimes punishable by life imprisonment or death. In some instances the apparent duplication provides clarification. Absent a separate specific category, crimes of violence might not be understood to include felonies involving the use of firearms, explosives, or other dangerous weapons, as was often the case prior to creation of the explicit firearm category. By the same token, listing offenses punishable by death or life imprisonment makes it clear that espionage is covered without the necessity of inquiring whether a particular offense in fact involved the risk of violence, which would qualify it as a crime of violence. Section 3156 provides still further clarification. It defines "crimes of violence" for purposes of Section 3142 and several other provisions of the bail chapter to mean not only a crime with a violent element and a crime that involves the risk of violence, but also various federal sex offenses including interstate prostitution and possession or distribution of child pornography--that is, any felony under chapter 109A (sexual abuse), 110 (sexual exploitation of children), or 117 (interstate travel of illicit sexual purposes). Risk- D riven D etention . The judge or magistrate may also order pretrial detention when the accused is charged with other offenses, but the judge or magistrate finds, after a hearing, that the accused poses a serious risk of flight or obstruction of justice. Section 3142 dictates what the judge or magistrate must include within his release or detention order. Release orders, whether issued following a detention hearing or upon conditional release without such a hearing, provide the accused with written notification of the conditions of his release, the consequences of violating a condition of release, and of the prohibitions on obstruction of justice. Detention orders contain written findings and justifications. They also direct custodial authorities to hold the accused apart from other detainees to the extent possible, to permit him to consult with his attorney, and to deliver him up for subsequent judicial proceedings. After the issuance of an order, the court is free (1) to amend a release or detention order; (2) to reopen the detention hearing to consider newly discovered information or changed circumstances; or (3) to permit an accused under a detention order to assist in the preparation of his defense or to be temporarily released for other compelling reasons. Release orders and detention orders are final orders for appellate purposes, and either the government or the accused may appeal them. Federal law treats bail following conviction but prior to sentencing in one of three ways depending upon the crime of conviction. First, a defendant may not be detained prior to sentencing for an offense for which the U.S. Sentencing Guidelines do not recommend a sentence of imprisonment. Second, when the defendant has been convicted of a capital offense, a 10-year federal crime of terrorism, a 10-year controlled substance offense, a crime of violence, or a violation of 18 U.S.C. SS1591 (commercial sex trafficking), the defendant must be detained unless the court finds that the defendant is not likely to flee or pose a safety concern, and either that a motion for acquittal or a new trial is likely to be granted, or that the prosecution has recommended no sentence of imprisonment be imposed, or that exceptional reasons exist for granting bail. Third, in any other case, the defendant must be detained, unless the court concludes that the defendant is unlikely to flee or pose a safety concern if released conditionally or on his own recognizance. When a defendant appeals following conviction, the judge or magistrate may release him on condition or recognizance, if the judicial official is convinced that the defendant poses neither a flight risk nor a safety concern and that his appeal raises substantial questions that offer the prospect of success. "A question is substantial if the defendant can demonstrate that it is 'fairly debatable' or is 'debatable among jurists of reason.'" An additional requirement applies when the defendant has been sentenced to prison upon conviction for a capital offense, a 10-year federal crime of terrorism, a 10-year controlled substance offense, or a crime of violence. In such cases, bail is available only under exceptional circumstances. The circumstances considered exceptional have been variously described as uncommon, unusual, unique, and rare. When the government alone appeals, the pretrial bail provisions of Section 3142 apply, unless the government is simply appealing the sentence imposed. When the government appeals the sentence imposed, the defendant must be detained if he has been sentenced to a term of imprisonment; otherwise, Section 3142 applies. A number of consequences flow from an individual's failure to appear or to honor the conditions imposed upon his release. He may be prosecuted for contempt of court; he may be prosecuted separately for failure to appear; his release order may be revoked or amended; security pledged for his compliance may be forfeited; he may be subject to arrest by his surety; and he may be prosecuted for any crimes that constituted a violation of his bail conditions. It is a separate federal crime to fail to appear for required judicial proceedings or for service of sentence. "To establish a violation of 18 U.S.C. SS3146, the government ordinarily must prove that the defendant (1) was released pursuant to Title 18, Chapter 207 of the U.S. Code, (2) was required to appear in court, (3) knew he was required to appear, (4) failed to appear as required, and (5) was willful in his failure to appear." An individual enjoys an affirmative defense if he fails to appear through no fault of his own. An individual who fails to appear for his supervised release revocation hearing is liable only if he was released on bail in anticipation of the hearing. The penalty for violation of Section 3146, which ranges from imprisonment for not more than one year to imprisonment for not more than 10 years, is calibrated to reflect the seriousness of the underlying offense. When an individual is convicted for failure to appear for a supervised release revocation hearing, the sentence for violation of Section 3146 is governed by the offense with respect to which supervised release was granted. An individual who violates a condition of his release on bail may also be prosecuted for contempt of court. When an individual commits a crime while on bail, federal law provides an additional penalty: "A person convicted of an offense committed while released under this chapter shall be sentenced, in addition to the sentence prescribed for the offense, to (1) a term of imprisonment of not more than ten years if the offense is a felony; or (2) a term of imprisonment of not more than one year if the offense is a misdemeanor." The lower federal appellate courts have held that the penalty enhancement under Section 3147 may be imposed based on a failure to appear in violation of Section 3146. It may also be imposed when the post-bail offense was a continuation of the offense that occasioned the individual's original release on bail. Faced with failure to comply with a condition of release, the judge or magistrate may amend an individual's release order amending existing conditions or adding new ones. The judge or magistrate may also order revocation of the release order and detention of the individual after a hearing, if he finds either probable cause to believe that the individual has committed a new offense or by clear and convincing evidence that the individual has breached some other condition of his release. The new detention order must be premised on a finding that the individual is unlikely to abide by the conditions imposed for his release or that there is no combination of conditions sufficient to guard against the individual's flight or danger to the public or any member of the public. A finding of probable cause that the individual has committed a new offense triggers a presumption that no combination of conditions will dispel concerns for public safety. The judge or magistrate may order any bail bond or other security forfeited, if the individual fails to appear at judicial proceedings as required or fails to appear to begin service of his sentence. The court must do so if he fails to abide by any condition imposed for his release. The prosecution begins the process with a motion to enforce. If the surety returns the individual to the custody of the court, or if not contrary to interests of justice, the court may set aside, mitigate, or remit the forfeiture or may exonerate the surety and release the bail. A surety on an appearance bond is entitled to notice and to be heard on any material amendment to the conditions of release. The U.S. Probation and Pretrial Service Office conducts preliminary investigations and otherwise assists the courts in their administration of federal bail law. Its officers enjoy statutory authority to provide judges and magistrates with information relevant to initial bail determinations; prepare reports relevant for the review of release and detention orders; supervise bailees released into its custody; operate halfway houses, treatment facilities, and the like for those released on bail; inform the court and prosecutors of release order violations; advise the court on the availability of third-party custodians; help bailees secure employment, medical, legal, and social services; prepare reports on supervision of pretrial detainees; prepare reports on the bail system; prepare pretrial diversion reports for prosecutors; contract for the performance of its responsibilities; supervise and report on prisoners conditionally released following hospitalization for mental disease or defect; carry firearms; provide services for juveniles; and perform other functions assigned to it by the bail laws. Federal law authorizes the arrest and detention or bail of individuals with evidence material to the prosecution of a federal offense. With limited variations, federal bail laws apply to material witnesses arrested under Section 3144. Thus, arrested material witnesses are entitled to the assistance of counsel during bail proceedings and to the appointment of an attorney when they are unable to retain private counsel. Release is generally favored; if not, release with conditions or limitations is preferred, and finally as a last option detention is permitted. An accused is released on his word (personal recognizance) or bond unless the court finds such assurances insufficient to guarantee his subsequent appearance or to ensure public or individual safety. A material witness, however, need only satisfy the appearance standard. A material witness who is unable to do so is released under such conditions or limitations as the court finds adequate to ensure his later appearance to testify. If neither word nor bond nor conditions will suffice, the witness may be detained. The factors a court may consider in determining whether a material witness is likely to remain available include his deposition, character, health, and community ties. Federal bail laws make no mention of bail in extradition cases. The federal courts instead adhere to the doctrine announced by the Supreme Court over a century ago that "bail should not ordinarily be granted in cases of foreign extradition" except under "special circumstances." The doctrine has withstood constitutional challenge. There is no precise definition of what constitutes "special circumstances"; the category is reserved for those extraordinary characteristics of a case which the court feels merit the designation. In addition, the individual must establish that if released, he will not flee or pose a danger and may be made subject to whatever relevant conditions the court deems to impose.

This is an overview of the federal law of bail. Bail is the release of an individual following his arrest upon his promise--secured or unsecured; conditioned or unconditioned--to appear at subsequent judicial criminal proceedings. An accused may be denied bail if he is unable to satisfy the conditions set for his release. He may also be denied bail if the committing judge or magistrate concludes that no amount of security or any set of conditions will suffice to ensure public safety or the individual's later appearance in court. The federal bail statute layers the committing judge's or magistrate's bail options after arrest and before trial. He may release the individual upon his promise to return--that is, on personal recognizance or under an unsecured appearance bond. Alternatively, the judge or magistrate may condition the individual's release on the least restrictive possible combination of individual or statutory conditions. The statute, however, creates a presumption against release when the individual has been charged with a serious drug, firearms, or terrorist offense. In the case of these and other serious offenses, the judge or magistrate may deny release on bail if he decides, after a hearing, that no set of conditions will guarantee public safety or the individual's return to court. The judge or magistrate may also deny the individual bail in order to transfer him for bail, parole, or supervised release revocation proceedings. Bail is available to a more limited extent after the individual has been convicted and is awaiting a pending appeal. Federal law also authorizes the arrest, bail, or detention of individuals with evidence material to the prosecution of a federal offense. With limited variations, federal bail laws apply to arrested material witnesses. Although not specifically mentioned in the federal bail statute, bail is available in extradition cases under a long-standing Supreme Court precedent which holds that "bail should not ordinarily be granted in cases of foreign extradition" except under "special circumstances." This report is an abridged version of CRS Report R40221, Bail: An Overview of Federal Criminal Law, by [author name scrubbed]--without footnotes, appendixes, most of the citations to authority, and some of the discussion found in the longer report.

Research published by the Kaiser Family Foundation (KFF) indicates that two-thirds of parents say they are "very" concerned that children in this country are being exposed to too much inappropriate content in the media, and a substantial proportion think sex (55%) and violence (43%) in the media contribute "a lot" to young people's behavior. Thirty-two percent of parents cite TV as the medium that concerns them the most, but the proportion who cite the Internet has increased over the past two years from 16% to 21%. Sixty-six percent of parents say they favor government regulations to limit the amount of sex and violence on TV during the early evening hours, a proportion that is virtually unchanged from 2004. Although exposure to inappropriate material has long been a concern to parents, only since the Telecommunications Act of 1996 has there been a nationwide effort to provide parents with a tool to control their children's television viewing--the V-chip. The V-chip, which reads an electronic code transmitted with the television signal (cable or broadcast), is used in conjunction with a television programming rating system. Using a remote control, parents can enter a password and then program into the television set which ratings are acceptable and which are unacceptable. The chip automatically blocks the display of any programs deemed unacceptable; use of the V-chip by parents is entirely optional. Since January 1, 2000, all new television sets with a picture screen 13 inches or greater sold in the United States have been required to be equipped with the V-chip. Additionally, some companies also offer devices that can work with non-V-chip TV sets. The initial ratings system was developed during 1996 and 1997, but encountered criticism from within Congress as well as from groups such as the National Parent-Teacher Association. In response to those concerns, an expanded ratings system was adopted on July 10, 1997, and went into effect October 1, 1997. The first step in implementing the mandate of the law was to create a ratings system for television programs, analogous to the one developed and adopted for movies by the Motion Picture Association of America (MPAA) in 1968. The law urged the television industry to develop a voluntary ratings system acceptable to the FCC, and the rules for transmitting the rating, within one year of enactment. The ratings system is intended to convey information regarding sexual, violent or other indecent material about which parents should be informed before it is displayed to children, provided that nothing in the law should be construed to authorize any rating of video programming on the basis of its political or religious content. After initial opposition, media and entertainment industry executives met with then-President Clinton on February 29, 1996, and agreed to develop the ratings system because of political pressure to do so. Many in the television industry were opposed to the V-chip, fearing that it would reduce viewership and reduce advertising revenues. They also questioned whether it violated the First Amendment. Industry executives said they would not challenge the law immediately, but left the option open should they deem it necessary. Beginning in March 1996, a group of television industry executives under the leadership of Jack Valenti, then-president of the MPAA (and a leader in creating the movie ratings), met to develop a TV ratings system. On December 19, 1996, the group proposed six age-based ratings (TV-Y, TV-Y7, TV-G, TV-PG, TV-14 and TV-M), including text explanations of what each represented in terms of program content. In January 1997, the ratings began appearing in the upper left-hand corner of TV screens for 15 seconds at the beginning of programs, and were published in some television guides. Thus, the ratings system was used even before V-chips were installed in new TV sets. Ratings are assigned to shows by the TV Parental Guidelines Monitoring Board. The board has a chairman and six members each from the broadcast television industry, the cable industry, and the program production community. The chairman also selects five non-industry members from the advocacy community, for a total of 24 members. News shows and sports programming are not rated. Local broadcast affiliates may override the rating given a particular show and assign it another rating. Critics of the initial ratings system argued that the ratings provided no information on why a particular program received a certain rating. Some advocated an "S-V-L" system (sex, violence, language) to indicate with letters why a program received a particular rating, possibly with a numeric indicator or jointly with an age-based rating. Another alternative was the Home Box Office/Showtime system of 10 ratings such as MV (mild violence), V (violence), and GV (graphic violence). In response to the criticism, most of the television industry agreed to a revised ratings system (see box, below) on July 10, 1997, that went into effect October 1, 1997. The revised ratings system added designators to indicate whether a program received a particular rating because of sex (S), violence (V), language (L), or suggestive dialogue (D). A designator for fantasy violence (FV) was added for children's programming in the TV-Y7 category. On March 12, 1998, the FCC approved the revised ratings system, along with V-chip technical standards, and the effective date for installing them. The Appendix contains a description of the industry's revised TV ratings system. In May 1999, the FCC created a V-chip Task Force, chaired by then-Commissioner Gloria Tristani. Among other things, the task force was charged with ensuring that the blocking technology was available and that ratings were being transmitted ("encoded") with TV programs; educating parents about V-chip; and gathering information on the availability, usage, and effectiveness of the V-chip. The task force issued several reports and surveys. A February 2000 task force survey found that most broadcast, cable, and premium cable networks, and syndicators, were transmitting ratings ("encoding") and those that were not either planned to do so in the near future or were exempt sports or news networks. Of the major broadcast and cable networks, only NBC and Black Entertainment Television do not use the S-V-L-D indicators, using the original ratings system instead. On April 25, 2007, the FCC released a report on the "presentation of violent programming and its impact on children." In the report, the FCC-- found that on balance, research provides strong evidence that exposure to violence in the media can increase aggressive behavior in children, at least in the short term; noted that although viewer-initiated blocking and mandatory ratings would impose lesser burdens on protected speech, skepticism remains that they will fully serve the government's interests in promoting parental supervision and protecting the well-being of minors; stated that the V-chip is of limited effectiveness in protecting children from violent television content; observed that cable operator-provided advanced parental controls do not appear to be available on a sufficient number of cable-connected television sets to be considered an effective solution at this time; stated that further action to enable viewer-initiated blocking of violent television content would serve the government's interests in protecting the well-being of children and facilitating parental supervision and would be reasonably likely to be upheld as constitutional; found that studies and surveys demonstrate that the voluntary TV ratings system is of limited effectiveness in protecting children from violent television content; stated that Congress could develop an appropriate definition of excessively violent programming, but such language needs to be narrowly tailored and in conformance with judicial precedent; suggested that industry could on its own initiative commit itself to reducing the amount of excessively violent programming viewed by children (e.g., broadcasters could adopt a family hour at the beginning of prime time, during which they decline to air violent content); observed that multichannel video programming providers (MVPDs) could provide consumers greater choice in how they purchase their programming so that they could avoid violent programming. (e.g., an a la carte regime would enable viewers to buy their television channels individually or in smaller bundles); and found that Congress could implement a time channeling solution and/or mandate some other form of consumer choice in obtaining video programming, such as the provision by MVPDs of video channels provided on family tiers or on an a la carte basis (e.g., channel blocking and reimbursement). On March 2, 2009, the FCC adopted and released a Notice of Inquiry (NOI) to implement the Child Safe Viewing Act of 2007. The Child Safe Viewing Act directed the FCC to initiate a proceeding within 90 days after the date of enactment to examine "the existence and availability of advanced blocking technologies that are compatible with various communications devices or platforms." Congress defined "advanced blocking technologies" as "technologies that can improve or enhance the ability of a parent to protect his or her child from any indecent or objectionable video or audio programming, as determined by such parent, that is transmitted through the use of wire, wireless, or radio communications." Congress's intent in adopting the act was to spur the development of the "next generation of parental control technology." In conducting this proceeding, the FCC will examine blocking technologies that may be appropriate across a wide variety of distribution platforms and devices, can filter language based upon information in closed captioning, can operate independently of pre-assigned ratings, and may be effective in enhancing a parent's ability to protect his or her child from indecent or objectionable programming, as determined by the parent. The NOI covered not only broadcast, cable, and satellite television, but also wireless devices, non-networked devices, and Internet content. The FCC released its report based on the NOI on August 29, 2009. In the report, the FCC concluded that a market exists for advanced blocking technologies and other parental empowerment tools, although data is lacking in certain key areas, such as awareness and usage levels, which warrant further study. Educational programs to increase awareness of parental control technologies have the potential to accelerate the rate of development, deployment, and adoption of these technologies. Parental control technologies vary greatly among media platforms, and even among different providers within the same media platform, with respect to various criteria. While there are technologies in existence for each media platform, there is not currently a universal parental control technology that works across media platforms. To explore these issues and how to maximize benefits and minimize harms to children, the FCC issued a second NOI exploring these issues and others relating to protecting children and empowering parents in the digital age on October 23, 2009. In the second NOI, the FCC asked to what extent children were using electronic media, the benefits and risks this presents, and the ways in which parents, teachers, and children can help reap the benefits while minimizing the risks of using these technologies. The FCC also recognized that a wealth of academic research and studies exist on these issues and asked commenters to identify additional data and studies, and to indicate where further study is needed. The NOI additionally seeks comment about the effectiveness of media literacy efforts in enabling children to enjoy the benefits of media while minimizing the potential harms. The NOI recognizes that other federal agencies are addressing similar issues, at least with respect to online safety, and asks what the FCC can do to assist with these efforts. No report has been released as a result of this NOI, but since the beginning of 2011, there have been renewed discussions at the FCC over possibly updating the ratings system using this proceeding as a vehicle. There was no legislative action on the V-Chip in the 111 th Congress and no legislative action thus far in the 112 th Congress. On December 2, 2008, then-President Bush signed into law the "Child Safe Viewing Act of 2007." This law was originally introduced by Senator Mark Pryor and, as discussed above, requires the FCC to examine the existence and availability of advanced blocking technologies that parents could use across a variety of communications devices or platforms. The Senate and the House of Representatives each held one hearing on issues related to the V-Chip during the 110 th Congress: The Senate Committee on Commerce, Science, and Transportation held a hearing, "Impact of Media Violence on Children," on June 26, 2007. The hearing focused on issues related to the impact of violent television programming on children, including issues raised by the FCC report, "Violent Television Programming And Its Impact On Children." The House Committee on Energy and Commerce Subcommittee on Telecommunications and the Internet held a hearing, "Images Kids See on the Screen," on June 22, 2007. The hearing included discussion of advertising for junk food aimed at children and on the inability of the V-chip to screen out undesirable advertising. From 1998 through 2007, the Kaiser Family Foundation (KFF) conducted research into the impact of media violence on children and the effectiveness of the V-chip and television ratings as tools for parents to control access to undesirable television content. In the Foundation's most recent report, published in June 2007, two-thirds of parents say they are "very" concerned that children in this country are being exposed to too much inappropriate content in the media, and a substantial proportion think sex (55%) and violence (43%) in the media contribute "a lot" to young people's behavior. Thirty-two percent of parents cite TV as the medium that concerns them the most, but the proportion who cite the Internet has increased over the past two years from 16% to 21%. Sixty-six percent of parents say they favor government regulations to limit the amount of sex and violence on TV during the early evening hours, a proportion that is virtually unchanged from 2004. Overall, the parents interviewed for the study stated that they were more concerned about inappropriate content on TV than in other media: 32% said TV concerned them most, compared to 21% who said the Internet, 9% movies, 7% music, and 8% video games. Half (50%) of all parents said they have used the TV ratings to help guide their children's viewing, including slightly more than one in four (28%) who said they use them "often." Furthermore, the study revealed that while use of the V-chip has increased substantially since 2001, when 7% of all parents said they used it, it remains modest at just 15% of all parents, or about four in 10 (42%) of those who have a V-chip in their television and know it. Nearly two-thirds (61%) of parents who have used the V-chip said they found it "very" useful. Other significant findings reported included: After being read arguments on both sides of the issue, nearly two-thirds of parents (63%) said they favored new regulations to limit the amount of sex and violence in TV shows during the early evening hours, when children were most likely to be watching (35% are opposed). A majority (55%) of parents said ratings should be displayed more prominently and 57% said they would rather keep the current rating systems than switch to a single rating for TV, movies, video games, and music (34% favor the single rating). When read the competing arguments for subjecting cable TV to the same content standards as broadcasters, half of all parents (52%) said that cable should be treated the same, while 43% said it should not. Most parents who have used the TV ratings said they found them either "very" (38%) or "somewhat" (50%) useful. About half (52%) of all parents said most TV shows are rated accurately, while about four in ten (39%) said most are not. Many parents do not understand what the various ratings guidelines mean. For example, 28% of parents of young children (2-6 years old) knew what the rating TV-Y7 meant (directed to children age 7 and older) while 13% thought it meant the opposite (directed to children under 7); and only 12% knew that the rating FV ("fantasy violence") is related to violent content, while 8% thought it meant "family viewing." In releasing the survey results, Vicky Rideout, vice president and director of the Kaiser Family Foundation's Program for the Study of Entertainment Media and Health, commented, "While many parents have used the ratings or the V-chip, too many still don't know what the ratings mean or even that their TV includes a V-chip." A number of groups conducted research and published opinion pieces questioning the usefulness and/or legality of the V-chip and the ratings system after the 1996 Telecommunications Act was enacted (e.g., the Progress and Freedom Foundation, the American Civil Liberties Union, Cato Institute, Morality in Media). Since that time, opposition has waned and even the controversies over inappropriate content being broadcast live did not renew it. Further, while the V-chip and the ratings system can block objectionable or indecent programming when used in tandem, since the incidents were broadcast "live" and did not have ratings that would have blocked them, neither the V-chip nor the ratings system would have been effective in either case. Therefore, some could claim that the V-chip and the ratings system, while useful tools in many cases, remain unreliable tools for parents because they cannot guarantee all objectionable content will be blocked. In the Child Safe Viewing Act, Congress addressed most of the issues that have been raised by various interest groups about the V-chip. However, the issue that appears not to be able to be addressed through legislation, which is to educate parents and make them aware of the tools available to them, still remains. According the 2004 KFF Study, parents also indicated that they would like to see the ratings displayed more prominently to make it easier to notice them. Such findings are consistent with a lack of wide-spread usage or even awareness of the V-chip. Specifically, as noted above, the 2004 KFF study indicated that even after years of being available, only 42% of parents who have a V-chip and are aware of it actually use it. However, of the parents that had used the V-chip, 89% found it "somewhat" to "very" useful. Those figures would indicate that increased knowledge of the V-chip would substantially increase parents' perceptions of control over their children's television viewing. One of the easiest approaches to increasing the use of the V-chip may likely be to step up parental awareness programs through, for example, public service announcements on television, educational materials on the FCC website, and possibly public service advertisements in print media. Additionally, such educational materials could be made available on congressional member websites for constituents to download. Such actions would not require any new legislation or additional work by the ratings board or related entities; however, some initially may require funding. "The Perils of Mandatory Parental Controls and Restrictive Defaults," Progress and Freedom Foundation, April 2008, http://www.pff.org/issues-pubs/pops/pop15.4defaultdanger.pdf . "Parents, Media, and Public Policy: A Kaiser Family Foundation Survey," Kaiser Family Foundation, Fall 2004, http://www.kff.org/entmedia/entmedia092304pkg.cfm . "V-chip Frequently Asked Questions," Children Now, http://www.childrennow.org/media/vchip/vchip-faq.html . "Summary of Focus Group Research on Media Ratings Systems," A Study Commissioned by PSV Ratings, Inc., Spring 2003, http://www.independentratings.org/Parents_Views.pdf . Federal Communications Commission V-chip Information, http://www.fcc.gov/vchip/ .

To assist parents in supervising the television viewing habits of their children, the Communications Act of 1934 (as amended by the Telecommunications Act of 1996) requires that, as of January 1, 2000, new television sets with screens 13 inches or larger sold in the United States be equipped with a "V-chip" to control access to programming that parents find objectionable. Use of the V-chip is optional. In March 1998, the Federal Communications Commission (FCC) adopted the industry-developed ratings system to be used in conjunction with the V-chip. Congress and the FCC have continued monitoring implementation of the V-chip. Some are concerned that it is not effective in curbing the amount of TV violence viewed by children and want further legislation. On August 31, 2009, the FCC released a report implementing the Child Safe Viewing Act of 2007. In the act, Congress had directed the FCC to examine "the existence and availability of advanced blocking technologies that are compatible with various communications devices or platforms." Congress defined "advanced blocking technologies" as "technologies that can improve or enhance the ability of a parent to protect his or her child from any indecent or objectionable video or audio programming, as determined by such parent, that is transmitted through the use of wire, wireless, or radio communications." Congress's intent in adopting the act was to spur the development of the "next generation of parental control technology." In a second inquiry issued in October 2009, the FCC is addressing additional issues it was unable to fully address based on its first inquiry. There has been no action related to the V-Chip in the 112th Congress.

For more than 50 years, the Small Business Administration (SBA) Disaster Loan Program has been a source of economic assistance to people and businesses stricken by disasters. Authorized by the Small Business Act, the program provides direct loans to help businesses, nonprofit organizations, homeowners, and renters repair or replace property damaged or destroyed in a federally declared or certified disaster. The SBA Disaster Loan Program is also designed to help small agricultural cooperatives recover from economic injury resulting from a disaster. SBA disaster loans include (1) Home and Personal Property Disaster Loans, (2) Business Physical Disaster Loans, and (3) Economic Injury Disaster Loans (EIDL). Most direct disaster loans (approximately 80%) are awarded to individuals and households rather than small businesses. The program generally offers low-interest disaster loans at a fixed rate. SBA disaster loans have loan maturities of up to 30 years. This report provides an overview of the Disaster Loan Program, discusses how disaster declarations trigger the SBA loan process, explains the different types of loans potentially available to disaster victims, and discusses terms and restrictions related to each type of loan. The report also provides data on the SBA Disaster Loan Program, including data related to the Gulf Coast hurricanes of 2005 and 2008, and Hurricane Sandy in 2012. This report also examines issues that may be of potential interest to Congress, such as SBA loan processing times, the implementation of expedited and immediate assistance programs required by Small Business Disaster Response and Loan Improvements Act of 2008, and the use of personal residences as collateral for business disaster loans. The following section describes the types of disaster loans available to homeowners, renters, and businesses, including the amount that can be borrowed, the program's loan terms, and eligibility requirements. Most SBA disaster assistance (roughly 80%) goes to individuals and households rather than businesses. SBA disaster assistance is provided in the form of loans, not grants, and therefore must be repaid to the federal government. Homeowners, renters, and personal property owners located in a declared disaster area (and in contiguous counties) may apply to SBA for loans to help recover losses from the disaster. Disaster loans provided to individuals and households fall into two categories: Personal Property Loans and Real Property Loans. A Personal Property Loan provides a creditworthy homeowner or renter located in a declared disaster area with up to $40,000 to repair or replace personal property owned by the victim. Eligible items include furniture, appliances, clothing, and automobiles damaged or lost in a disaster. These loans cover only uninsured or underinsured property and primary residences in a declared disaster area. Eligibility of luxury items with functional use, such as antiques and rare artwork, is limited to the cost of an ordinary item meeting the same functional purpose. Interest rates for Personal Property Loans cannot exceed 8% per annum or 4% per annum if the applicant is found by SBA to be unable to obtain credit elsewhere. Generally, borrowers pay equal monthly installments of principal and interest, beginning five months from the date of the loan. Loan maturities may be up to 30 years. Real Property Loans provide creditworthy homeowners located in a declared disaster area with up to $200,000 to repair or restore the homeowner's primary residence to its pre-disaster condition. Only uninsured or otherwise uncompensated disaster losses are eligible. The loans may not be used to upgrade a home or build additions to the home, unless the upgrade or addition is required by city or county building codes. Repair or replacement of landscaping and/or recreational facilities cannot exceed $5,000. A homeowner may borrow funds to cover the cost of improvements to protect their property against future damage (e.g. retaining walls, sump pumps, etc.). Mitigation funds may not exceed 20% of the disaster damage, as verified by SBA, to a maximum of $200,000 for home loans. As with Personal Property Loans, interest rates for Real Property Loans cannot exceed 8% per annum or 4% per annum if the applicant is unable to obtain credit elsewhere. Generally, borrowers pay equal monthly installments of principal and interest, beginning five months from the date of the loan. Loan maturities may be up to 30 years. SBA disaster assistance for businesses is also in the form of loans rather than grants and must therefore be repaid. SBA offers loans to help businesses repair and replace damaged property and financial assistance to businesses that have suffered economic loss as a result of a disaster. Disaster loans provided to businesses fall into two categories: Business Physical Disaster Loans and Economic Injury Disaster Loans (EIDL). Any business, regardless of size (other than an agricultural enterprise), located in a declared disaster area may be eligible for a Business Physical Disaster Loan. Business Physical Disaster Loans provide 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 in their business. Businesses may utilize up to 20% of the verified loss amount for mitigation measures 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. As with personal disaster loans, borrowers generally pay equal monthly installments of principal and interest starting five months from the date of the loan. SBA will consider other payment terms if the business has seasonal or fluctuating income. Business Physical Disaster Loans maturities may be up to 30 years. EIDLs are available only to businesses located in a declared disaster area, have suffered substantial economic injury, are unable to obtain credit elsewhere, and are defined as small by SBA size regulations (which vary from industry to industry). For example, to be considered small, most manufacturing firms must have no more than 500 employees and most retail trade firms must have no more than $7 million in average annual sales. 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. Substantial economic injury "is such that the business concern is unable to meet its obligations as they mature or to pay its ordinary and necessary operating expenses." The maximum loan amount for an EIDL is $2 million. 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 loan can have a maturity of up to 30 years and has an interest rate of 4% or less. 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." In general, the incident must be sudden and cause severe physical damage or substantial economic injury (such as tornadoes, hurricanes, and earthquakes). In contrast, some slow-onset events (incidents that unfold over time) such as shoreline erosion or gradual land settling are not viewed by SBA as declarable disasters. Droughts and below-average water levels in lakes, reservoirs, and other bodies of water may, however, warrant declarations. There are five ways in which the SBA Disaster Loan Program can be put into effect. These include two types of presidential declarations as authorized by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act), and three types of SBA declarations. While the type of declaration may determine what types of loans are made available, declaration type has no bearing on loan terms or loan caps. The following describes each type of declaration: 1. The President issues a major disaster declaration, or an emergency declaration, and authorizes both Individual Assistance (IA) and Public Assistance (PA). When the President issues such a declaration, SBA disaster loans become available to homeowners, renters, businesses of all sizes, and nonprofit organizations located within the disaster area. EIDL loans may also be made for victims in contiguous counties or other political subdivisions. 2. The President makes a major disaster declaration that only provides the state with PA. In such a case, a private nonprofit entity located within the disaster area that provides noncritical services may be eligible for an SBA disaster loan. The entity must first have applied for an SBA disaster loan and must have been deemed ineligible or must have received the maximum amount of assistance from SBA before seeking grant assistance from FEMA. Home and physical property loans are not provided if the declaration only provides PA. 3. The SBA Administrator issues a physical disaster declaration in response to a gubernatorial request for assistance. When the SBA Administrator issues this type of declaration, SBA disaster loans become available to eligible homeowners, renters, businesses of all sizes, and nonprofit organizations within the disaster area or contiguous counties and other political subdivisions. 4. 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. This declaration is offered only when other viable forms of financial assistance are unavailable. Small agricultural cooperatives and most private nonprofit organizations located within the disaster area or continuous counties and other political subdivisions are eligible for SBA disaster loans when the SBA Administrator issues an EIDL declaration. 5. The SBA Administrator may issue a declaration for EIDL loans based on the determination of a natural disaster by the Secretary of Agriculture. These loans are available to eligible small businesses, small agricultural cooperatives, and most private nonprofit organizations within the disaster area, or contiguous counties and other political subdivisions. Additionally, the SBA administrator may issue a declaration based on the determination of the Secretary of Commerce that a fishery resource disaster or commercial fishery failure has occurred. As shown in Table 1 and Figure 1 , 4,210 declarations were issued from 2000 through 2014--an average of 279 a year. The greatest number of declarations (2,431) were issued by the Secretary of Agriculture (an average of 162 a year). In contrast, the fewest declarations came from the Secretary of Commerce (only two were issued during the time period). The following section describes the SBA Disaster Loan Program's trends and statistics including the number of disaster loan applications and amounts by loan type. As shown in Table 3 , SBA approved 533,628 disaster loan applications totaling over $26.5 billion for home, business, and EIDLs from 2000 to 2014. Both the number and amount of disaster loans approved vary from year to year, largely due to the varying severity of hurricane damages during the time period. Not all approved applicants accept the loans. Approximately 72% (380,450 loans) of approved disaster loans during the time period, amounting to roughly $15.5 billion, were actually disbursed to businesses and households. Figure 2 displays the percent of all approved loans that were disbursed each year. As shown in Table 3 and Figure 3 , from FY2000 to FY2014, 83.1% of disbursed disaster loans were home disaster loans (including Home Physical Disaster Loans and Personal Property Loans), 11.2% were for Business Physical Disaster Loans, and 5.7% were EIDLs. As shown in Table 3 , SBA disbursed 21,862 EIDLs from FY2000 to FY2014. These loans totaled approximately $2.0 billion. The average number of disbursed EIDLs per year from FY2000 to FY2014 was 1,457. The average amount of EIDLs provided by SBA per year during the same period was $135 million. As shown in Table 3 , SBA disbursed 316,004 home disaster loans (including Home Physical Disaster Loans and Real Property Loans) from FY2000 to FY2014. These loans totaled approximately $9.7 billion. The average number of disbursed home disaster loans per year from FY2000 to FY2014 was 21,067. The average amount of home disaster loans provided per year during the same period was $650 million. As shown in Table 3 , SBA disbursed 42,584 Business Physical Disaster Loans from FY2000 to FY2014. These loans totaled approximately $3.7 billion. The average number of disbursed Business Physical Disaster Loans from FY2000 to FY2014 was 2,839. The average amount of Business Physical Disaster Loans provided per year during the same period was $247 million. Several issues related to the SBA Disaster Loan Program may be of interest to Congress, including disaster loan processing times, the implementation of expedited and immediate assistance programs mandated by the Small Business Disaster Response and Loan Improvement Act of 2008, the use of personal residences for loan collateral, and the use of grants, as opposed to loans, to help businesses respond and recover from disasters. The SBA was criticized for not processing disaster loan applications in a timely manner following the Gulf Coast hurricanes of 2005 and 2008. On September 25, 2009, Manuel Gonzalez, Director of the SBA Houston District Office, testified before the Senate Committee on Small Business and Entrepreneurship that the agency's 2008 response to Hurricane Ike demonstrated programmatic improvements. According to Gonzalez, loan processing times had decreased and better interagency cooperation had been achieved. Gonzalez conceded, however, that there was still room for improvement. In FY2009, SBA's goal was to process 85% of disaster loan applications within 14 days for home disaster loans and within 18 days for business physical disaster loans and EIDLs. SBA continued to compare its actual performance against this standard even though it subsequently specified reduced standards of 27 days for home disaster loans and 30 days for business physical disaster loans and EIDLs in FY2013 Since then, SBA has established more approximate processing standards based on tiered levels of application volumes for all disaster loans: two to three weeks for less than 50,000 applications per year (level I); three to four weeks for 50,001--250,000 applications per year (level II); four-plus weeks for more than 250,000 applications per year (level III); and more than four-plus weeks for more than 500,000 applications per year (level IV). According to SBA, the percent of disaster loans processed within its new, tiered standard performance goal was 100% in FY2010, 100% in FY2011, 95% in FY2012, 55% in FY2013, and 100% in FY2014. SBA noted that its lower performance in FY2013 was largely due to increased loan volumes following Hurricane Sandy. Hurricane Sandy made landfall in southern New Jersey on October 29, 2012. The hurricane caused approximately $67 billion in damages, displaced more than 775,000 persons, and resulted in at least 59 fatalities. As of May 12, 2015, SBA had approved 36,911 hurricane Sandy disaster loans, totaling approximately $2.49 billion. In January 2013, there was a backlog of over 29,000 disaster loan applications pending processing. SBA extended office hours, shifted personnel, reallocated work, and hired additional personnel to address the backlog. It also created two expedited loan processes: one for home loans for applicants with relatively high incomes and good credit scores, and another for EIDLs. As a result of these efforts, the backlog was reduced to about 3,000 by April 2013. An SBA OIG study found that SBA's expedited process for home disaster loans reduced the application processing time by 2.3 days (18.7 days versus 21 days) compared to the standard processing method and SBA's expedited process for business disaster loans increased the application processing time by 4.4 days (43.3 days versus 38.9 days) compared to the standard processing method. The SBA OIG also found that neither of the expedited methods reduced the overall time from application acceptance to initial loan disbursements. Congress may be concerned that SBA disaster loans should be processed more quickly following major disasters, like Hurricane Sandy, in order to provide timely assistance to businesses and households. Congress could conduct oversight on loan processing and explore potential methods that might improve loan processing time. For example, SBA is moving from paper-based to electronic platforms to reduce processing times. On the other hand, some might caution that processing loans too quickly could potentially lead to waste, fraud, and abuse. From this perspective, Congress could examine methods for reducing processing time while guarding against the unintended consequence of an increased potential for loan fraud and abuse. In response to criticism of SBA's disaster loan processing following the Gulf Coast hurricanes of 2005 and 2008, and in an effort to improve SBA's Disaster Loan Program, Congress passed the Small Business Disaster Response and Loan Improvements Act of 2008 ( P.L. 110-234 ). The act included a number of measures to improve SBA's Disaster Loan Program. The act is divided into three parts as follows: Part I, Disaster Planning and Response: Part 1 of the act includes a number of measures intended to improve SBA's coordination with other agencies when responding to disasters. For instance, Section 12062(a)(5) requires the SBA administrator to ensure that the agency's disaster assistance programs are coordinated, to the maximum extent practicable, with FEMA's disaster assistance programs. Section 12063(5) requires that the administrator make every effort to communicate, through radio, television, print, and internet-based outlets, all relevant information needed by disaster loan applicants. Section 12069(a) requires that if SBA's primary facility for disaster loan processing becomes unavailable, another disaster loan processing facility must be made available within two days. Part II, Disaster Lending: Part 2 of the act provides additional loan amounts in certain circumstances, reforms some of SBA's loan processes, and grants SBA authority to defer payments of loans made to homeowners and businesses affected by the 2005 Gulf Coast hurricanes. For example, Section 12081 grants the SBA administrator authority to provide additional disaster assistance for events that cause significant loss of life or damage, Section 12084 establishes the Immediate Disaster Assistance Program, Section 12085 establishes an Expedited Disaster Assistance Loan Program, and Section 12086 allows the SBA administrator to carry out a program to refinance Gulf Coast disaster loans. Part III, Miscellaneous: Part 3 of the act pertains to reporting requirements for SBA disaster assistance programs. Section 12091 requires, after a major disaster, the SBA administrator to submit to the Senate Committee on Small Business and Entrepreneurship, the Senate Committee on Appropriations, the House Committee on Small Business, and the House Committee on Appropriations a report on the operation of the Disaster Loan Program not later than the fifth business day of each month during the applicable period for a major disaster. The reports must include the daily average lending volume (in number of loans and dollars), the percentage by which each category has increased or decreased since the previous report, the amount of funding available for loans, and an estimate of how long the available funding for salaries and expenses will last, based on SBA's spending rate. Among the programs intended to improve SBA's Disaster Loan Program are three guaranteed loan programs established in Part II of the act: the Expedited Disaster Assistance Loan Program (EDALP), the Immediate Disaster Assistance Program (IDAP), and the Private Disaster Assistance Program (PDAP). These programs are intended, in part, to help homeowners and business who are in immediate need of assistance. Section 12084 of the act required the SBA Administrator to establish and implement IDAP. It would provide businesses interim "bridge loans" through private sector lenders of up to $25,000 within 36 hours after SBA receives the loan application. Section 12085 of the act required the SBA Administrator to establish and implement EDALP which would provide up to $150,000 in "bridge" loans to businesses more quickly than standard SBA disaster loans. EDALP was designed to disburse the loans more quickly than standard SBA disaster loans. Section 12083 required the SBA Administrator to establish and implement PDAP. PDAP would provide up to $2 million in guaranteed loans to both businesses and homeowners. A 2014 GAO report found that SBA had not piloted or implemented the three programs. Consequently, these programs were unavailable in response to Hurricane Sandy. In the case of IDAP, SBA responded that informal feedback from various lenders indicated the "parameters of IDAP would make it difficult to implement." SBA also stated that it had developed forms and drafted a procedural guide but had not a conducted formal evaluation including lender feedback. While SBA has initiated the development of forms and procedural guidelines for the new programs, Congress may be concerned the loan programs are not being implemented in a timely manner. Congress may also be concerned that households and businesses may not have access to expedited loan assistance in future disasters if SBA fails to implement the mandated programs. With respect to lender feedback, Congress could conduct oversight concerning potential methods that could encourage lenders to participate in the program. To the extent that worthwhile assets are available, adequate collateral is required as security on all SBA loans. Assets such as equipment, buildings, accounts receivable, and (in some cases) inventory are considered by SBA as possible sources of repayment if they can be sold by the bank for cash. Collateral can consist of assets that are usable in the business as well as personal assets that remain outside the business. Collateral includes items such as a lien on the damage or replacement property, a security interest in personal/business property, or both. Loan recipients can assume that all assets financed with borrowed funds will be used as collateral for the loan. However, SBA generally will not decline a loan when inadequacy of collateral is the only unfavorable factor in a disaster loan application and SBA is reasonably sure that the applicant can repay the loan. SBA may decline or cancel loans for applicants who refuse to pledge available collateral. SBA does not require collateral for the following: EIDL . Generally, SBA does not require collateral to secure EIDLS of $25,000 or less. Physical Disaster Home and Physical Disaster Business Loans : SBA will not require collateral to secure a physical disaster home or physical disaster business loan of $14,000 or less. In addition, if a major disaster declaration is declared, SBA generally will not require collateral to secure a physical disaster home or physical disaster business loan of $25,000 or less. SBA requires collateral for loans larger than the amounts specified above as well as certified appraisals for loans greater than $250,000 secured by commercial real estate. In addition, SBA may require professional appraisals of both business and personal assets, plus any necessary survey and/or feasibility study. When real estate is being used as collateral, banks and other regulated lenders are required by law to obtain third-party valuation on transactions of $50,000 or more. According to the report published by the Bipartisan Task Force on Hurricane Sandy Recovery, some businesses could not obtain an SBA disaster loan unless they used their personal residences as collateral. Some business owners who lacked other forms of collateral were reluctant to use their personal residences as collateral because it was the only tangible asset they had left after the storm. The report also indicated that some businesses could not afford disaster loans even with six months grace periods and interest rates of 1%. Congress could explore methods that help business owners obtain disaster loans without using their personal residences as collateral, or prohibit SBA from requiring personal residences as collateral for disaster loans. For example, S. 956 , the Small Business Disaster Reform Act of 2015 would prohibit SBA from requiring a small business owner to use their primary residency as collateral if the owner has other assets with a value equal to, or greater than, the loan amount that could be used. With respect to the affordability of disaster loans, one potential solution suggested by the Bipartisan Task Force was the use of direct grants--similar to grants provided households by the Federal Emergency Management Agency (FEMA)--to help businesses rebuild and recover from disasters. Some, however, might express concern over the costs associated with providing grants. For example, between 2004 and 2013, FEMA provided renters and homeowners roughly $16 billion in grants through its Individual and Households Program (IHP). Providing grants to businesses could significantly increase federal expenditures for grant assistance. Critics of providing grants may also argue that, traditionally, grants have not been provided to businesses by Congress because businesses are responsible for obtaining insurance as part of their business portfolio. As mentioned earlier in this report, disaster loans have statutorily established ceilings on interest rates. Floors on interest rates, however, are not statutorily set. In general, interest is based on current average market rates as determined by the SBA Administrator (unless market rate exceeds the ceilings). Interest rates may therefore vary from disaster to disaster. For example, the interest rates for business loans in 2011 for businesses affected by flooding in Pennsylvania had an interest rate of 4% while interest rates for businesses affected by Hurricane Katrina in 2005 had an interest rate of 2.9%. To some, this may be perceived as inequitable. In other cases, some individuals and households cannot repay their loans despite the lower interest rates. Some may argue that Congress should establish a set interest for all disasters. Congress may also consider lowering interest rates for existing disaster loans. For example, H.R. 2857 , introduced in the 113 th Congress, would have restructured qualifying disaster loans at a lower rate. Congress could also consider offering loan forgiveness to those who are having difficulty repaying their loans. As a general rule, SBA does not offer loan forgiveness unless Congress intervenes. One exception 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 Hurricane Betsy. 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. Others may argue that interest rates are sufficiently low and that interest rates are needed to cover the administrative costs associated with disaster loans. Low interest rates and forgiveness could undermine SBA efforts to recoup some of the costs needed to administer the program. Supporters of the SBA Disaster Loan Program might contend that the SBA Disaster Loan Program has made improvements since Hurricane Katrina made landfall in 2005. They may argue that loan processing times have been reduced and interagency coordination has improved as evidenced by the response to hurricanes Gustav and Ike. On the other hand, others might argue that the SBA response to Hurricane Sandy indicates loan processing time still needs to be addressed. Some may also be troubled by SBA's perceived slow progress in implementing some of the requirements set forth in the Small Business Disaster Response and Loan Improvements Act of 2008 such as the implementation of EDALP and IDAP. They may further contend that the agency's response could have been more successful had these programs been in place before Hurricane Sandy. Why Does SBA Issue Disaster Loans Instead of FEMA? In 1978, President Jimmy Carter signed Executive Order 12127. The order merged many of the disaster-related responsibilities of separate federal agencies into the Federal Emergency Management Agency (FEMA). During FEMA's formation, it was 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. McIntyre added, "We believe we have achieved a balance in this new agency [FEMA] between operational activities and planning and coordination functions." He further stated that "we can provide better service to the disaster victims if oversight of disaster response and recovery operations is vested in an agency which can adopt a much broader prospective than would be possible if this agency [FEMA] had operational responsibilities as well." Additionally, a clause in the Stafford Act that prohibits recipients of disaster aid from receiving similar types of aid from other federal sources is often cited as a rationale for keeping the entities distinct. Section 312 of the act states: 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. SBA Disaster Loan Approvals for Applicants in Gulf Coast States The following figures are provided to help frame discussions concerning SBA Loan Program activity in the Gulf Coast in response to the 2005 and 2008 hurricane seasons.

Through its Office of Disaster Assistance (ODA), the Small Business Administration (SBA) has been a major source of assistance for the restoration of commerce and households in areas stricken by natural and human-caused disasters since the agency's creation in 1953. Through its disaster loan program, SBA offers low-interest, long-term loans for physical and economic damages to businesses to help repair, rebuild, and recover from economic losses after a declared disaster. The majority of the agency's disaster loans, however (over 80%) are made to individuals and households (renters and property owners) to help repair and replace homes and personal property. The three main types of loans for disaster-related losses include (1) Home and Personal Property Disaster Loans, (2) Business Physical Disaster Loans, and (3) Economic Injury Disaster Loans (EIDL). Home Physical Disaster Loans provide up to $200,000 to repair or replace disaster-damaged primary residences. Personal Property Loans provide up to $40,000 to replace personal items such as furniture and clothing. Business Physical Disaster Loans provide up to $2 million to help businesses of all sizes and nonprofit organizations repair or replace disaster-damaged property, including inventory and supplies. Business Physical Disaster Loans and EIDLs also provide assistance to small businesses, small agricultural cooperatives (but not enterprises), and certain private, nonprofit organizations that have suffered substantial economic injury resulting from a physical disaster or an agricultural production disaster. EIDLs provide up to $2 million in financial assistance to businesses located in a disaster area that have suffered economic injury as a result of a declared disaster (regardless if there has been physical damage to the business). Congressional interest in the Disaster Loan Program has increased in recent years primarily because of concerns about the program's performance in responding to the Gulf Coast hurricanes of 2005 and 2008 as well as Hurricane Sandy in 2012. This report describes the SBA Disaster Loan Program, including the types of loans available to individuals, households, businesses, and nonprofit organizations, and highlights issues that may be of potential congressional concern. These concerns include SBA loan processing times, the use of personal residences as collateral for business disaster loans, and the implementation of expedited and immediate assistance programs required by Small Business Disaster Response and Loan Improvements Act of 2008.

In the past year, policy consequences of U.S. aid restrictions on International Criminal Court (ICC) member countries that have not signed agreements exempting U.S. citizens from ICC prosecution have prompted policy-makers to alter the policy somewhat. Latin America has been at the forefront of that reassessment. In particular, some negative consequences for U.S. relations with Latin America have occurred as a result of ICC-related sanctions. Restrictions on military training aid have resulted in a dramatic decline in the number of Latin American military personnel receiving training in the United States. Similarly, restrictions on economic aid have hindered the ability of U.S. democracy and rule of law programs to work with governments in the region, especially in the Andean countries. Although most Members of Congress still support efforts to shield U.S. citizens serving abroad from ICC prosecution, many are beginning to oppose the use of sanctions to attempt to persuade countries to sign bilateral immunity (so-called "Article 98" agreements). Some Members of Congress advocate ending all ICC-related aid restrictions, while others believe that at least some restrictions should remain in place in order to encourage other countries to sign Article 98 agreements. The issue of whether to continue these aid restrictions is likely to be considered by the 110 th Congress. This paper discusses the evolving policy debate in the U.S. government concerning the use of ICC-related foreign aid restrictions. It focuses on the case of Latin America and the Caribbean, a region in which twelve countries (including Brazil, Bolivia, Ecuador and Mexico) have faced aid cutbacks for failing to sign an Article 98 agreement. In July 2002, the Rome Statute that created the International Criminal Court (ICC) entered into force. The ICC is the first permanent world court with jurisdiction to try individuals accused of war crimes and other serious human rights abuses. The United Nations, human rights groups, and most democratic nations supported the creation of the ICC. As of March 1, 2007, 104 countries have ratified the Rome Statute and are currently members of the ICC. The United States is not a party to the court and does not recognize ICC jurisdiction over U.S. soldiers or civilians serving in other countries. The ICC, comprised of eighteen judges and based in The Hague, may hear cases referred to it by the U.N. Security Council or by the states that are parties to the court. The ICC's lead prosecutor may also initiate investigations. Before a case may be tried, the ICC must work with national law enforcement agencies that, with support from the international community, must make arrests and send defendants to The Hague. Since its creation, the ICC has received three referrals by state parties, and the U.N. Security Council also referred the situation of allegations of atrocities being committed in Darfur, Sudan to the prosecutor. The prosecutor has opened investigations into the cases involving the Democratic Republic of the Congo, the Republic of Uganda, and Darfur, Sudan. In October 2005, the ICC issued its first arrest warrants to five individuals implicated in connection to the situation in Northern Uganda. Some analysts have recently asserted that the Bush Administration has begun to soften its once vocal opposition to the International Criminal Court (ICC). They argue that strong opposition to the ICC within the Administration has been gradually dissipating, particularly since the U.S. government allowed the U.N. Security Council to refer the Darfur, Sudan situation to the ICC in March 2005. According to State Department spokesman Sean McCormack, "We [the U.S. government] fully support bringing to justice those responsible for crimes and atrocities that have occurred in Darfur. We are at a point in the process where we could call upon the Sudanese government to cooperate fully with the ICC." Other analysts remain skeptical about whether a fundamental shift in U.S. policy towards the ICC is occurring and believe that, regardless of the court's merits, the U.S. government is going to continue to do all that it can in order to protect its military and civilians serving abroad from ICC prosecution. Although the United States initially supported the idea of establishing an international criminal court, fundamental objections to the proposed court's jurisdiction led the United States to vote against the Rome Statute. The United States' primary objections to the Rome Statute focus on the ICC's possible assertion of jurisdiction over U.S. soldiers who could be charged with "war crimes" resulting from legitimate use of force or U.S. civilians who could be charged for conduct related to carrying out U.S. foreign policy initiatives. Accordingly, the United States has sought immunity provisions through the U.N. Security Council for U.N.-authorized peacekeeping operations, and has pursued bilateral agreements with countries that are parties to the ICC in order to preclude extradition or surrender of U.S. citizens from each respective country to the ICC. Since 2003, the Bush Administration has sought bilateral agreements worldwide to exempt Americans from ICC prosecution, so-called "Article 98 agreements." On May 2, 2005, Angola became the 100 th country to sign an Article 98 agreement. The State Department has not publicly announced the signing of any other Article 98 agreements since that time, but a few more agreements may have been concluded. Article 98 agreements involve each state promising that it will not surrender citizens of the other signatory to the ICC, unless both parties agree in advance to the surrender. Supporters of the policy say that these agreements are not unlike the status of forces agreements (SOFAs) routinely negotiated to protect U.S. soldiers serving abroad from prosecution in foreign courts and are consistent with Article 98 of the Rome Statute. Critics have dismissed Article 98 agreements as unnecessary and accused the U.S. government of "blackmailing" developing countries, many of which are heavily dependent on U.S. assistance, into adopting them. The United States has concluded Article 98 agreements with fifteen countries in Latin America and the Caribbean, thirteen of which are in force. Table 1 depicts the status of each country in the region with respect to the ICC and Article 98. Countries that are subject to sanctions under legislation are those that are both parties to the ICC and that have not entered into an Article 98 agreement with the United States. Those countries include Barbados, Bolivia, Brazil, Costa Rica, Ecuador, Mexico, Paraguay, Peru, St. Vincent and the Grenadies, Trinidad, Uruguay and Venezuela. Although it has not signed an Article 98 agreement, Argentina is exempt from sanctions as it was declared a "major non-Nato ally" in 1998. Bolivia initially received a six-month waiver from cuts in U.S. military assistance that began in July 2003 because it had signed, but not ratified, an Article 98 agreement. The waiver expired in early 2004. Most of the Article 98 agreements for Latin America that are currently in force were signed in 2003. In the past two years, only four additional countries in Latin America and the Caribbean are known to have signed Article 98 agreements. Some countries have vocally opposed U.S. efforts to persuade them to sign Article 98 agreements. In June 2005, then-president of Ecuador, Alfredo Palacios, said that Washington "is free" to defend its policies with respect to the ICC, "but not at the expense of Ecuador's sovereignty and legal standing." Other politicians in the region have accused the United States of "blackmailing Latin American governments into signing an agreement they oppose in principle." The Article 98 campaign has been particularly unpopular in South America, a region in which a majority of the citizens support accountability for past human rights abuses, international law, and the ICC. In October 2005, Mexico became the 100 th country to ratify the Rome Statute, despite the prospect of losing military and economic assistance from the United States. At that time, a Mexican government spokesman said that Mexico "will be irrefutable in supporting the protocols of the international court, whatever the cost." Chile is considering ratifying the Rome Statute and is also unlikely to conclude an Article 98 agreement. There has been strong bipartisan support in Congress for legislation aimed at protecting U.S. soldiers and civilian officials from the jurisdiction of the ICC. Until recently, there had also been strong support for sanctioning some foreign assistance to governments of countries that are parties to the ICC and that do not have Article 98 agreements with the United States. The American Servicemembers' Protection Act or ASPA ( P.L. 107-206 , Title II) prohibits military assistance to countries that have not signed Article 98 agreements. On July 1, 2003, pursuant to the ASPA, the Bush Administration terminated military assistance to governments of countries that had not signed Article 98 agreements. Under the legislation, NATO countries or major non-NATO allies are exempted from those military aid restrictions. ASPA also gives the President the authority to waive the prohibition on military assistance without prior notice to Congress if he determines and reports to the appropriate committees that such assistance is important to the national interest. ASPA has affected International Military Education and Training (IMET) and Foreign Military Financing (FMF) assistance. The Nethercutt Amendment to the FY2005 Consolidated Appropriations Act ( H.R. 4818 / P.L. 108-447 ) prohibited Economic Support Funds (ESF) assistance to the governments of countries that have not entered into an Article 98 agreement with the United States. Some countries, including NATO members and major non-NATO allies, are exempted from that aid restriction. The President could also waive the prohibition on economic assistance for selected countries without prior notice to Congress if he determined and reported to the appropriate committees that such assistance was important to the national interest. The language also stipulated that countries that have been deemed eligible for Millennium Challenge Account grants will not lose MCA eligibility status due to the Article 98 issue. The Nethercutt Amendment was re-enacted by the 109 th Congress as part of the FY2006 Foreign Operations Appropriations Act ( H.R. 3057 / P.L. 109-102 ). Unlike the FY2005 appropriation, however, the FY2006 act requires that the President give Congress notice before he invokes a waiver, but that waiver may apply for any country that he deems to be of strategic interest to the United States. It also stipulates that, since ESF may be obligated over a two-year period, any leftover funds from FY2005 may now be made available for democracy and rule of law programs notwithstanding the provisions of Sec. 574 of P.L. 108-447 . Nethercutt aid restrictions continued in the FY2007 Continuing Appropriations Resolution ( P.L. 109-289 , as amended) and are likely to be included in the FY2008 Foreign Operations Appropriation bill. On September 30, 2006, the Senate unanimously consented to a conference report on the FY2007 Defense Authorization, H.R. 5122 / S. 2766 , which was passed by the House on September 29. The conference agreement, following the Senate version of the bill, modifies ASPA to end the ban on International Military Education and Training (IMET) assistance to countries that are members of the ICC and that do not have Article 98 agreements in place. The President signed the bill into law, P.L. 109-364 , on October 17. Restrictions on Foreign Military Financing (FMF) remain in place under ASPA. During the 109 th Congress, another bill was introduced, H.R. 5995 (Engel), that would have ended all restrictions on U.S. aid to countries that are members of the ICC and that do not have Article 98 agreements in place. If it had passed, the bill would have required the repeal of both ASPA and the Nethercutt Amendment. The ASPA and the Nethercutt Amendment have had an impact on U.S. foreign assistance to Latin America and the Caribbean. Pursuant to the American Servicemembers' Protection Act or ASPA ( P.L. 107-206 , title II), the Bush Administration terminated military assistance to governments of countries that had not signed Article 98 agreements as of July 1, 2003. The military assistance prohibition has included International Military Education and Training (IMET) and Foreign Military Financing (FMF). The IMET program provides training on a grant basis to students from allied and friendly nations. FMF provides grants to foreign nations to purchase U.S. defense equipment, services, and training. In FY2003, prior to ASPA, the United States provided some $4.65 million in IMET among the 12 countries sanctioned by ASPA. This funding enabled 771 military officers and civilian officials from those countries to receive training in the United States. In FY2004, aside from Bolivia, which received a temporary waiver from ASPA provisions, none of those countries participated in IMET. ASPA-related sanctions resulted in a loss of $1.9 million in IMET funding in FY2005. Although military assistance losses may not be significant when viewed from a regional perspective, they have resulted in some acute aid cuts for particular countries, including Bolivia, Ecuador, and Peru. Some analysts also assert that FMF cutbacks, totaling some $4.4 million in FY2005 and $3 million in FY2006, have made some military modernization projects difficult for the affected countries to continue. Others have responded that the effects of IMET and FMF funding restrictions have not been that significant when one considers that they have been divided among several countries and have only been in effect for a few years. Through the security-related ESF program, the United States provides economic aid to countries of strategic interest to U.S. foreign policy. Funding decisions on the ESF program are made by the State Department; programs are managed by USAID and the State Department. Strategic countries of interest to the United States are generally located in the Middle East or South Asia, but 11 Latin American countries have received some ESF funding in recent years, with Bolivia, Ecuador, Mexico, and Peru among the largest recipients. In FY2004, ESF assistance to countries that are now subject to Nethercutt aid restrictions totaled at least $42.6 million, including some $11.4 million for Mexico and $10.5 million for Ecuador. ESF funds were spent on a variety of projects including democracy, rule of law, and economic growth programs. In the last year, policy consequences of the ASPA-mandated aid restrictions have prompted debates within the Administration and in Congress. In particular, consequences of aid cutbacks for U.S. security cooperation in Latin America have begun to be examined and have led to some policy shifts. This shift became evident in Administration policy, congressional hearings, and in new legislation. At the beginning of 2006, the Bush Administration appeared to be divided over whether to continue linking U.S. assistance to Article 98 agreements. Secretary of State Condoleezza Rice acknowledged that invoking ASPA sanctions on key U.S. military allies may be "sort of the same as shooting ourselves in the foot" and that waivers of military aid restrictions are being considered on a case-by-case basis. In addition, the Defense Department's Quadrennial Defense Review called for a possible de-linking of military training programs from ASPA. Although the Defense Department, and particularly the U.S. Southern Command, opposed ASPA sanctions on military aid, the Bureau of Political-Military Affairs of the State Department reportedly strongly supported keeping the sanctions in place. On June 22, 2006, Adolfo Franco, Assistant Administrator for Latin America and the Caribbean at the U.S. Agency for International Development, suggested that the Bush Administration was considering lifting ICC-related sanctions against Latin American countries. He stated that the Administration had not yet decided whether to lift the sanctions on all countries affected in the region or only for a select few. Some analysts asserted that the Administration might lift the sanctions in order to improve the United States' image in the region. Similar policy debates occurred during congressional hearings held early in 2006 that mentioned the effects of Article 98 sanctions on U.S. relations with Latin America. On March 8, 2006, the Subcommittee on Western Hemisphere Affairs of the Senate Foreign Relations Committee held a hearing on the "Consequences for Latin America of the American Servicemembers' Protection Act." Subcommittee Chair, Senator Norm Coleman, expressed concern that, as a result of the ASPA sanctions, the United States is "missing key opportunities to engage officers ... from the sanctioned countries" and that this could lead to "a loss of U.S. diplomatic influence in the region." Witnesses focused their testimonies on describing the political and military effects that ASPA and Nethercutt sanctions have had on countries in Latin America and the Caribbean. One analyst asserted that the loss of IMET is severing "an important linkage between future military leaders [from the region learning about]...the U.S. model of civilian control of the military." Reduced opportunities in the United States, he added, may lead countries in the region to look elsewhere, including China, Russia, or Venezuela for training. Similarly, ESF restrictions may hamstring both U.S. bilateral and regional efforts to push desperately needed structural reforms, especially in the Andean countries. Another analyst asserted that the implementation of ASPA has damaged U.S. standing in the region and that "the effort to punish countries that don't sign Article 98 agreements has been perceived ... as bullying or arm-twisting." The witnesses suggested several ways to mitigate the possible negative consequences of ASPA on Latin America and the Caribbean. Those suggestions included encouraging the Bush Administration to issue national interest waivers to key allies in Latin America or declare more countries in the region to be major non-NATO allies (thereby exempting them from the aid restrictions). Another suggested option would be to repeal section 2007 of the ASPA and omit the Nethercutt provision from 2007 Foreign Operations appropriations legislation. On March 14, 2006, General Bantz Craddock, then-Commander of the U.S. Southern Command, while testifying before the Senate Armed Services Committee, stated that the ASPA continues to have "unintended consequences" for Latin America, and that without IMET funding, countries have been unable to afford the unsubsidized cost of courses offered in the United States. He stated that "this loss of engagement prevents the development of long-term relationships with future [Latin American] military and civilian leaders." Senator John McCain agreed with General Craddock's concerns about ASPA sanctions. He asserted that the United States was paying "a very heavy price" in countries where military aid programs have been cut. His concerns about military aid cuts were echoed by Senators John Warner, Carl Levin, Hillary Clinton, and James Inhofe. On June 21, 2006, Representative Dan Burton, former chair of the House International Relations Committee's subcommittee on the Western Hemisphere, publicly asked the Bush Administration to changes its policy regarding ASPA sanctions, citing congressional concerns about China's expanding influence in the region. By the fall of 2006, the Bush Administration was ready to use waivers to waive restrictions on FY2006 IMET and ESF funds. On October 2, 2006, President Bush directed the Secretary of State to waive FY2006 IMET restrictions for 21 countries. Barbados, Bolivia, Brazil, Costa Rica, Ecuador, Mexico, Paraguay, Peru, St. Vincent and the Grenadines, Trinidad and Tobago, and Uruguay were among the countries that received presidential waivers. On November 28, 2006, pursuant to Section 574 of P.L. 109-102 , President Bush also deemed that it was in the U.S. national interest to waive Nethercutt restrictions on FY2006 ESF assistance for Bolivia, Costa Rica, Cyprus, Ecuador, Kenya, Mali, Mexico, Namibia, Niger, Paraguay, Peru, Samoa, South Africa, and Tanzania. As previously mentioned, the 109 th Congress took action to end the ban on IMET restrictions but has left Nethercutt aid restrictions in the Foreign Operations Appropriations bills. On September 30, 2006, the Senate unanimously consented to a conference report on the FY2007 Defense Authorization, H.R. 5122 / S. 2766 , which was passed by the House on September 29. The conference agreement, following the Senate version of the bill, modifies ASPA to end the ban on International Military Education and Training (IMET) assistance to countries that are members of the ICC and that do not have Article 98 agreements in place. The President signed the bill into law, P.L. 109-364 , on October 17. Restrictions on Foreign Military Financing (FMF) remain in place under ASPA. Although some Members of Congress advocate ending all ICC-related sanctions, others believe that some aid restrictions should remain in place in order to encourage other countries to sign Article 98 agreements. The issue of whether to continue these aid restrictions is likely to be considered during the 110 th Congress.

During 2006, the Administration and Congress began to reassess some aspects of U.S. policy towards the International Criminal Court (ICC) because of unintended negative effects of that policy on relations with some ICC member countries, especially in Latin America. In Congress, support for aid restrictions on foreign aid to ICC member countries that have not agreed to exempt U.S. citizens from the court's jurisdiction has diminished. This policy shift has occurred largely because of increasing concerns about the negative effects that ICC-related sanctions have had on U.S. relations with Latin America, particularly in the area of security cooperation. In July 2002, the Rome Statute that created the ICC, the first permanent world court created to judge cases involving serious human rights abuses, entered into force. The United States is not a party to the ICC and does not recognize its jurisdiction over U.S. citizens. Since 2002, the Bush Administration has sought bilateral agreements worldwide to exempt U.S. citizens from ICC prosecution, so-called "Article 98 agreements." There has been strong bipartisan support in Congress for legislation aimed at protecting U.S. soldiers and civilian officials from the jurisdiction of the ICC. In 2002, Congress passed the American Servicemembers' Protection Act or ASPA (P.L. 107-206, title II), which prohibits military assistance to countries that are party to the ICC and that do not have Article 98 agreements. The Nethercutt Amendment to the FY2005 Consolidated Appropriations Act (H.R. 4818/P.L. 108-447) and FY2006 Foreign Operations Appropriations Act (H.R. 3057/P.L. 109-102) prohibited some economic assistance to the governments of those same countries. Nethercutt aid restrictions continued in the FY2007 Continuing Appropriations Resolution (P.L. 109-289, as amended) and are likely to be included in the FY2008 Foreign Operations Appropriation bill. The FY2007 Defense Authorization Act (H.R. 5122/P.L. 109-364), which President Bush signed into law on October 17, 2006, modifies ASPA to end the ban on International Military Education and Training (IMET) assistance to affected countries. Restrictions on Foreign Military Financing (FMF) remain in place. On November 28, 2006, pursuant to section 574 of P.L. 109-102, President Bush waived Nethercutt restrictions on FY2006 Economic Support Funds (ESF) to 14 countries, including Bolivia, Costa Rica, Ecuador, Mexico, Paraguay, and Peru. While some Members of Congress advocate ending all ICC-related sanctions, others believe that some aid restrictions should remain in place in order to encourage other countries to sign Article 98 agreements. The issue of whether to continue these aid restrictions is likely to be considered during the 110th Congress. This report may be updated.

Workers who lose their jobs due to a natural or other disaster can seek assistance through several federally supported programs. In many cases, disaster-affected workers will be served by permanent programs and systems that provide assistance to workers who involuntarily lose their jobs. In some cases, entities located within geographic areas affected by disasters can qualify for additional support that is limited to serving disaster-affected workers. This report discusses two income support programs and two employment service programs. In each benefit category, there is a broader permanent program and a more-targeted program for disaster-affected workers. Unemployment C ompensation 1 (UC) provides a weekly cash payment to workers who are involuntarily unemployed and meet other criteria. States administer UC benefits with U.S. Department of Labor (DOL) oversight. UC is financed via payroll taxes paid by employers: UC benefits are funded by state unemployment taxes (SUTA) and UC administration is funded by a federal unemployment tax (FUTA). UC benefits are considered entitlements for eligible workers and are required to be paid promptly. Disaster Unemployment Assistance (DUA) provides a weekly cash payment to individuals who become unemployed as a direct result of a major disaster and are not eligible for UC benefits. DUA is funded through the Federal Emergency Management Agency (FEMA) and administered by DOL through each state's UC agency. Dislocated Worker Activities under the Workforce Innovation and Opportunity Act (WIOA-DW) provides federal formula grants to states to provide training and career services to workers who involuntarily lose their jobs and meet other criteria. WIOA-DW grants are funded via discretionary appropriations to DOL and administered by state workforce agencies and local partners with DOL oversight. Disaster Dislocated Worker Grants (DDWGs) provide competitive federal grants that support temporary disaster response jobs for workers who are unemployed as a direct result of a disaster. DDWGs are awarded by DOL to the state and local partners that receive WIOA-DW funds. In terms of scale, the primary infusion of funds for disaster-affected workers will typically come from increased numbers of UC payments and, to a lesser extent, the availability of DUA benefits. Because UC and DUA outlays increase as the need grows, these funds can be responsive to the scale of a disaster. Conversely, WIOA-DW and DDWG funds are typically limited by annual appropriations and therefore may be less scalable than UC and DUA, which are entitlements for individuals. This report focuses on programs that provide assistance to workers on the basis of job loss due to a disaster. Other programs that may support such disaster-affected individuals but do not have job loss as an eligibility criterion are not included. Similarly, this report does not discuss programs that may assist workers who lost their jobs due to a disaster but establish eligibility based on criteria other than job loss, such as being low-income. Since some of the systems that support disaster-affected workers are permanent and have general eligibility criteria, benefit receipt is not contingent on a disaster meeting specific criteria. For example, disaster-affected workers may qualify for UC on the basis of becoming unemployed due to conditions created by a disaster (e.g., the place of business is closed because of a disaster), but benefit receipt does not require the presence of a specific type or magnitude of disaster. Similarly, the WIOA-DW system serves workers whose job loss is due to a disaster as well as workers who lose their jobs for other reasons. DUA and DDWG are contingent on disasters being declared as such. DUA benefits are available only to those individuals who have become unemployed as a direct result of a declared major disaster as determined under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( P.L. 100-707 , the Stafford Act) and if the disaster declaration includes the notice of availability of DUA benefits. DDWG assistance can be awarded in response to a disaster or emergency declared under the Stafford Act or "an emergency or disaster situation of national significance that could result in a potentially large loss of employment, as declared or otherwise recognized ... by a federal agency." The joint federal-state UC program is permanently authorized and provides income support through weekly UC benefit payments to eligible unemployed workers. The DUA program provides income support to individuals who become unemployed as a direct result of a major disaster and are not eligible for UC benefits. These unemployment insurance programs are entitlement programs funded through direct spending; benefits provided through these programs are not limited by appropriations. Consequently, these programs may be responsive to unemployment caused by disasters. Created under the Social Security Act of 1935, UC is a joint federal-state system that provides unemployment benefits to eligible individuals who become involuntarily unemployed for economic reasons and meet state-established eligibility rules. States administer UC benefits with oversight from DOL. Although federal laws and regulations provide some broad guidelines on UC benefit coverage, eligibility, and benefit determination, the specifics of benefits are determined by each state. This results in essentially 53 different UC programs. The UC program is financed by federal payroll taxes (FUTA) and state payroll taxes (SUTA). The 0.6% effective net FUTA tax paid by employers on the first $7,000 of each employee's earnings (no more than $42 per worker per year) funds federal and state administrative costs, loans to insolvent state UC accounts, the federal share (50%) of Extended Benefit (EB) payments, and state employment services. States levy their own payroll taxes (SUTA taxes) on employers to fund regular UC benefits and the state share of the EB program. SUTA is "experience rated" in all states; that is, the SUTA rate is based on the amount of UC paid to former employees. Generally, the more UC benefits paid to its former employees, the higher the tax rate of the employer, up to a maximum established by state law. The experience rating is intended to ensure an equitable distribution of UC program taxes among employers in relation to their use of the UC program, and to encourage a stable workforce. If economic conditions, such as recession, require the payment of UC benefits such that SUTA revenue is inadequate, states may have insufficient funds to pay for their UC benefits. Federal law, which requires states to pay these benefits, provides a loan mechanism within the Unemployment Trust Fund (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. The UC program pays benefits to workers who become involuntarily unemployed for economic reasons and meet state-established eligibility rules. The UC program generally does not provide UC benefits to the self-employed, those who are unable to work, or those who do not have a recent earnings history. Additionally, states usually disqualify claimants who lost their jobs because of inability to work, voluntarily quit without good cause, were discharged for job-related misconduct, or refused suitable work without good cause. In order to receive UC benefits, claimants must have enough recent earnings (distributed over a specified period) to meet their state's earnings requirements; and be able to, available for, and actively searching for work. The UC program provides income support to eligible workers through the payment of weekly cash benefits during a spell of unemployment. UC benefits are available for a maximum duration of up to 26 weeks in most states. UC benefits may be extended at the state level by the permanent law Extended Benefits (EB) program if high unemployment exists within the state. After regular unemployment benefits are exhausted, the EB program may provide up to an additional 13 or 20 weeks of benefits, depending on worker eligibility, state law, and economic conditions in the state. The EB program was established by the Federal-State Extended Unemployment Compensation Act of 1970 (EUCA; P.L. 91-373). Workers who become unemployed as a result of a disaster may qualify for UC. For example, if a natural disaster damages a place of employment and the condition of the facility prevents the employees from working, the displaced workers may qualify for UC if they meet all the eligibility requirements. The UC program generally does not provide benefits to the self-employed, individuals who are unable to work, or individuals who do not have a recent earnings history. However, when a major disaster is declared, victims who would typically be ineligible for UC may be eligible for DUA. In cases where a disaster creates increased unemployment, a state may be more likely to meet the criteria to trigger onto an EB period and, thus, provide EB benefits to eligible individuals in that state. The DUA program provides income support to individuals who become unemployed as a direct result of a major disaster and are not eligible for UC benefits. First created in 1970 through P.L. 91-606, DUA benefits are authorized by the Stafford Act. DUA benefits are funded through the Disaster Relief Fund (DRF) administered by the Federal Emergency Management Agency (FEMA). The DRF is funded annually through appropriations and is a "no-year" account, meaning that any unused funds from the previous fiscal year (if available) are carried over to the next fiscal year. In general, when the balance of the DRF becomes low, Congress provides additional funding through both annual and supplemental appropriations to replenish the account. DOL administers the DUA program and coordinates with FEMA to provide the funds to the state UC agencies for payment of DUA benefits and payment of state administration costs under agreements with DOL. Based on the request of the affected state's governor, the President may declare a major disaster. The declaration identifies the areas in the state eligible for assistance. The declaration of a major disaster provides the full range of disaster assistance available under the Stafford Act, which may include, but is not limited to, the repair, replacement, or reconstruction of public and nonprofit facilities; cash grants for the personal needs of victims; housing; and unemployment assistance related to job loss from the disaster (i.e., DUA). Disaster-affected workers who are ineligible for UC may be eligible for DUA. The DUA benefits are available only to those individuals who work or live in the area of a declared disaster and have become unemployed as a direct result of the disaster. The individual eligibility requirements for DUA differ significantly from the UC program requirements. For example, eligibility for DUA benefits does not necessarily require that the individual have a substantial work history, and in some cases does not require that the worker be available for work (unlike the UC program requirements). In particular, the DUA regulation defines eligible unemployed workers to include the self-employed, workers who experience a "week of unemployment" following the date the major disaster began when such unemployment is a direct result of the major disaster, workers unable to reach the place of employment as a direct result of the major disaster, workers who were to begin employment and do not have a job or are unable to reach the job as a direct result of the major disaster, individuals who have become the breadwinner or major provider of support for a household because the head of the household has died as a direct result of the major disaster, and workers who cannot work because of injuries caused as a direct result of the major disaster. As with state UC programs, workers who do not have permission to work legally in the United States are not eligible for DUA benefits. Noncitizens must have a Social Security number and an alien registration card number in order to apply for DUA benefits. Generally, applications must be filed within 30 days after the date the state announces availability of DUA benefits. When applicants have good cause, they may file claims after the 30-day deadline. This deadline may be extended. However, initial applications filed after the 26 th week following the declaration date are not considered. Because DUA beneficiaries are not entitled to regular UC benefits, they are not eligible to receive Extended Benefits (EB). DUA benefits are generally calculated by state UC agencies under the provisions of the state law for UC in the state where the disaster occurred. When a reasonable comparative earnings history can be constructed, DUA benefits are determined in a similar manner to regular state UC benefit rules. Self-employed persons are expected to bring in their tax records to prove a level of earnings for the previous two years. These records would take the place of the employer-reported wage data in UC benefit determination. Likewise, workers who would otherwise be eligible for UC benefits except for the injuries caused as a direct result of the disaster that make them unavailable for work would receive DUA benefits in an amount equivalent to what they would have received under the UC system if they were available to work. Workers who do not have an employment history sufficient to qualify for UC benefits (either as a new worker or recent hire) receive a DUA benefit equivalent to half of the average UC benefit for their state. The maximum weekly benefit amount is determined under the provisions of the state law and cannot be more than the maximum UC benefit available in that state. The minimum weekly DUA benefit a worker may receive is half of the average weekly UC benefit for the state where the disaster occurred. Two related programs for dislocated workers can assist individuals who involuntarily lose their jobs due to a disaster. Federally funded Dislocated Worker Activities grants under the Workforce Innovation and Opportunity Act (WIOA, P.L. 113-128 ) are formula grants to states to provide job training and career services to individuals who lose their jobs, while Disaster Dislocated Worker Grants are competitive grants that support the provision of temporary jobs for workers who become unemployed as a result of a disaster. WIOA authorizes formula grants to state workforce agencies to support dislocated workers. The bulk of a state's WIOA Dislocated Worker (WIOA-DW) funds are subgranted to local workforce development boards that provide actual workforce services. WIOA-DW funds may support career services or training benefits for qualified workers, including workers who become unemployed as a result of a disaster. WIOA-DW funds are funded by discretionary appropriations. Statute specifies that 20% of WIOA-DW funds are allotted to a national reserve that primarily supports National Dislocated Worker Grants (including Disaster Dislocated Worker Grants, described later in this report). The unreserved funds are allotted to state workforce agencies via a formula that considers several unemployment-related factors. From the WIOA-DW funds that are allotted to the states, governors may reserve up to 15% for statewide activities ("governor's reserve") and up to 25% for rapid response activities that respond to large-scale layoffs. The remainder of the state's WIOA-DW grant is allocated to local workforce development boards that provide or facilitate services and benefits to individual workers. Generally, an eligible dislocated worker for the purposes of this program is a worker who (1) has involuntarily lost his or her job, (2) has demonstrated a labor force attachment, typically through eligibility for UC, and (3) is unlikely to return to his or her prior job. Workers whose job loss is attributable to a disaster and who meet the other criteria for dislocated workers may access services supported by WIOA-DW grants. In cases where funding is insufficient to serve all eligible dislocated workers, statute specifies that local providers must prioritize low-income individuals. The WIOA definition of low-income includes recipients of certain means-tested benefits as well as homeless individuals. Services under WIOA-DW are separated into career services and training. Career services can include assessment of skills and needs, provision of labor market information, and various forms of job search assistance. Training is provided through individual training accounts and can include occupational classroom training, on-the-job training, or more general job readiness training. Local providers have a great deal of discretion in the specific career services and training benefits that are provided to each eligible dislocated worker. A worker who loses his or her job due to a disaster may not qualify for WIOA-DW services if he or she does not meet other dislocated worker criteria in law. For example, if a worker displaced by a disaster is expected to return to his or her prior job, the worker would not qualify. Disaster-affected workers who do not meet WIOA-DW eligibility criteria may seek assistance under less-targeted WIOA funding streams (see subsequent " WIOA Adult Activities " section). The governor's reserve is designed to allow the state to respond to unanticipated mass layoffs, such as layoffs due to a disaster (natural or otherwise). The governor may use funds from the reserve to support "rapid response" activities in areas within the state that experience large-scale dislocation. These rapid response activities include contacting dislocated workers immediately after dislocation to determine eligibility for various benefits and services as well as developing a coordinated local response in seeking state economic development aid. The WIOA-DW formula does not specifically target funds to disaster-affected areas. Because the formula is based on unemployment factors, areas with high levels of unemployment after a disaster may qualify for higher levels of funding in subsequent years' formula allocations. Due to the construction and implementation of the formula, however, it is possible that unemployment that results from a disaster may not be considered by the formula until a year or more after the disaster. The WIOA-DW program operates in partnership with WIOA Adult Activities (WIOA-AA), a separate grant program. WIOA-AA provides federal formula grants to states to support career services and training activities that are similar to those supported through the WIOA-DW program. Services under both WIOA-DW and WIOA-AA are typically provided by the same state agency at the same physical location. Unlike WIOA-DW funding, which is limited to a statutory definition of dislocated workers, WIOA-AA funding can be used to serve any jobseeker over the age of 18, including new labor force entrants and incumbent workers. Because eligibility for WIOA-AA benefits does not require job loss, the program does not fit this report's criteria for inclusion. Still, WIOA-AA benefits may provide career services and training benefits to disaster-affected workers whose job loss or job interruption does not meet the WIOA-DW definition. Disaster Dislocated Worker Grants (DDWGs) are grants that support disaster relief employment : temporary disaster recovery jobs for disaster-affected workers. In some cases, DDWGs can also support career services and training for participants already enrolled in temporary jobs or persons who have relocated due to a disaster. DDWGs are one of several types of National Dislocated Worker Grants (NDWGs). NDWGs are supported by a 20% reservation from the WIOA dislocated worker appropriation. DOL has the discretion to determine the portion of NDWGs that will be used for DDWGs. NDWGs are authorized by Section 170 of WIOA. DDWGs applications must be submitted by the state or territorial agency that receives WIOA-DW formula funds. States may initially apply for DDWGs using an abbreviated Emergency Application, which should be submitted within 15 days of the qualifying declaration. The state applicant must submit a full application within 60 days. While state agencies are the grantee, they may subgrant funds to local workforce development boards or expend funds through public and private agencies engaged in qualified projects. DDWG funds can be awarded to states that experience an emergency or major disaster as declared under the Stafford Act or by a federal agency. States may also qualify for a grant if a substantial number of individuals (at least 50) relocated to the state or area from a federally declared disaster area. Individuals eligible for disaster relief employment must either reside in the disaster-affected area or have been forced to relocate due to the disaster. In addition, eligible workers must be a dislocated worker as defined in Section 3(15) of WIOA, a long-term unemployed individual as defined by the state, temporarily or permanently laid off as a consequence of the disaster, or a self-employed individual who become unemployed or significantly underemployed as a result of the disaster. DDWGs primarily support Disaster Relief Employment: temporary jobs that respond to the disaster. Generally, these positions can be clean-up and recovery efforts such as demolition, repair, or reconstruction. Eligible temporary jobs can also include humanitarian efforts such as the distribution of food, clothing, or other provisions. Workers employed in Disaster Relief Employment must be paid wages that are the higher of the federal, state, or local minimum wage, or the comparable rate of pay for similar workers at the same employer. In most cases, a participant may not hold a temporary job for longer than 12 months or 2,080 hours. DDWGs can also support career and training services for dislocated workers who are already participating in temporary jobs and are unlikely to return to their prior employment. In cases where a DDWG is awarded on the basis of relocated workers, career and training services will be the primary services because eligible workers have relocated to outside the disaster area. When considering disaster response programs, it can be useful to consider funding mechanisms (e.g., federal appropriations or state taxes), funding limitations (e.g., capped or entitlements), and whether a program is designed as an immediate benefit or a longer-term investment. In the past, Congress has enacted legislation in response to some of these issues and program limitations. In budgetary terms, UC benefits are an entitlement (although the program is financed by a dedicated state tax imposed on employers in the state and not by general revenue). Similarly, DUA benefits are paid from federal funds appropriated for the DRF and have always been paid to individuals who meet the eligibility requirements in a manner similar to an entitlement. While funding for the DRF depends upon the appropriations process, when the balance of the DRF becomes low, Congress has always provided additional funding through both annual and supplemental appropriations to replenish the account. Consequently, both UC and DUA have the ability to rapidly respond to unemployment caused by disasters and provide immediate income support to the unemployed. However, increased UC outlays may potentially trigger increases on SUTA or FUTA taxes on the affected state's employers because even if a state's trust fund account is depleted, the state remains legally required to continue paying benefits. Such a state may need to raise SUTA taxes on its employers or reduce UC benefit levels. Alternatively, a state might borrow money either from the dedicated loan account within the UTF or from outside sources. If a 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. If the loans are not repaid within approximately two years, an increase in the net FUTA taxes faced by the state's employers may be triggered. In the past, Congress has enacted temporary measures to address high levels of UC claims and corresponding stress on state UC trust funds after a disaster. After Hurricane Katrina, Congress enacted the QI, TMA, and Abstinence Programs Extension and Hurricane Katrina Unemployment Relief Act of 2005 ( P.L. 109-91 ), which transferred $500 million from the Federal Unemployment Account of the UTF to the state accounts of Alabama ($15 million), Louisiana ($400 million), and Mississippi ($85 million). This helped to alleviate the burden of the increased UC claims and prevent or dampen automatic SUTA tax increases that would have otherwise occurred in response to increased state UC outlays. More recently, Congress enacted the Bipartisan Budget Act of 2018 ( P.L. 115-123 ). Among other provisions, P.L. 115-123 included Section 20801, which authorized a deferral of interest payments on an outstanding federal UI loan for the U.S. Virgin Islands. WIOA-DW and DDWG activities are supported by annual discretionary appropriations and associated activities are constrained by appropriations levels. In some cases, Congress has appropriated additional funds for these activities in disaster-related areas, though funding is not automatic and, because it must be appropriated, it is likely to be less timely than UC or DUA. Whether or not Congress appropriates supplemental funds, states have some flexibility to direct WIOA-DW funds to disaster-affected areas (particularly through the governor's reserve) and DOL has some discretion in awarding DDWG funds. DOL can, for example, choose to direct a larger portion of the National Dislocated Worker Set-Aside to DDWG activities, but it is still subject to annual funding limits and prioritizing DDWG activities will likely mean less funding for other National Dislocated Worker activities. Funding for workforce services has been expanded temporarily through additional appropriations that supplemented regular annual appropriations. In 2005, the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act ( P.L. 109-148 ) appropriated $125 million in supplemental funds for National Emergency Grants (a precursor to DDWGs) "related to the consequences of hurricanes in the Gulf of Mexico in calendar year 2005," of which Hurricane Katrina was the most severe. More recently, the aforementioned P.L. 115-123 appropriated $100 million to the dislocated worker national reserve (the intermediate funding stream that supports DDWGs) for expenses directly related to the consequences of Hurricanes Harvey, Maria, and Irma and for those jurisdictions that received a major disaster declaration due to wildfires in 2017. UC and DUA benefits usually offer the advantage of getting assistance to affected workers quickly, but benefits are of limited duration. Conversely, WIOA-DW and DDWG may offer less immediate relief, but may function as a longer-term investment in disaster-affected communities. Both UC and DUA benefits are structured to rapidly respond to economic conditions (caused by a disaster in the case of DUA) and provide immediate income support to the unemployed. In particular, each state agency responsible for administration of the UC program is assessed in part on the state's "methods of administration" to ensure that eligible claimants are paid UC benefits promptly when determined to be eligible. While these benefits can typically be provided quickly, it should be noted that the prompt payment of both UC and DUA benefits is dependent on a functioning state UC program. If the administrative abilities of the state offices are impacted by the disaster--as occurred in Louisiana after Hurricane Katrina and has also been experienced after the series of 2017 hurricanes in Puerto Rico and the U.S. Virgin Islands--the processing of claims and subsequent payment of benefits may be delayed. UC and DUA are available for a limited duration. UC is limited by state policy and is typically limited to 26 weeks. DUA assistance is available to eligible individuals as long as the major disaster continues, but no longer than 26 weeks after the disaster declaration. After Hurricane Katrina, Congress enacted the Katrina Emergency Assistance Act of 2006 ( P.L. 109-176 ). Section 2 of this law extended DUA benefits for persons eligible under the Stafford Act due to Hurricane Katrina or Hurricane Rita for an additional 13 weeks, for a total of 39 weeks of potential benefits. Workers who exhausted their UC benefits but had received less than a total of 39 weeks of benefits would receive DUA benefits for as many weeks as necessary to reach a total of 39 weeks of UC and DUA benefits combined. This extension did not apply to any subsequent major disasters. The WIOA-DW program's general strategy of preparing dislocated workers for locally in-demand jobs may offer limited short-term value, especially if large numbers of local worksites are disrupted due to the disaster. WIOA-DW activities could, however, be viewed as a longer-term investment in preparing dislocated workers for an area's post-disaster labor market. Disaster relief employment under DDWG is designed to respond to labor market disruptions by providing dislocated workers with federally subsidized employment while local labor markets recover. It may provide a more-immediate benefit than WIOA-DW activities, but the time necessary to award a DDWG, recruit workers, begin work, and pay the workers may create some time gap between a disaster and federal resources reaching workers. The 12-month maximum duration of disaster relief employment, however, may offer a longer benefit window than UC and/or DUA. Permanent law specifies that, in some cases, disaster relief employment under DDWGs can be extended past the original 12-month maximum for an additional 12 months. Supplemental appropriations can also extend the window for these programs. For example, the additional funds appropriated in the aforementioned P.L. 115-123 specified that the funds would be available through September 30, 2019, more than two years after the landfall of the 2017 hurricanes.

The federal government supports several programs that can provide assistance to workers who lose their jobs as a result of a natural or other disaster. In many cases, disaster-affected workers will be served by permanent programs and systems that generally provide assistance to workers who involuntarily lose their jobs. In some cases, disaster-triggered federal supports may be made available to provide additional assistance or aid to workers who do not qualify for assistance under the permanent programs. This report discusses two income support programs and two workforce service programs. In each benefit category, there is a broader permanent program and a more-targeted program for disaster-affected workers. All of these programs are administered through state agencies and some programmatic details may be state-specific. Unemployment Compensation (UC) provides a weekly cash payment to workers who are involuntarily unemployed and meet other criteria. States administer UC benefits with U.S. Department of Labor (DOL) oversight. UC benefits are considered entitlements for eligible workers and funded via payroll taxes paid by employers. Disaster Unemployment Assistance (DUA) provides a weekly cash payment to individuals who become unemployed as a direct result of a major disaster and are not eligible for UC benefits. DUA is funded by the federal government and benefits are paid through each state's UC agency. Dislocated Worker Activities under the Workforce Innovation and Opportunity Act (WIOA-DW) are federal formula grants to states to provide training and career services to workers who involuntarily lose their jobs and meet other criteria. WIOA-DW grants are funded via DOL appropriations and administered by state workforce agencies and local partners with DOL oversight. Disaster Dislocated Worker Grants (DDWGs) are competitive federal grants that support temporary disaster response jobs for workers who are unemployed as a direct result of a disaster. DDWGs are awarded by DOL to the state and local partners that receive WIOA-DW funds. Since UC and DUA outlays increase as the need grows, these funds can be responsive to the scale of a disaster. Conversely, WIOA-DW and DDWG funds are limited by appropriations levels and therefore may be less immediately scalable than UC and DUA, which are entitlements for individuals. In some instances, Congress has enacted legislation to temporarily expand these programs that serve disaster-affected workers or otherwise extend supplemental support to the states administering them. These prior efforts may serve as a model when Congress considers legislation to support workers affected by disasters.

The Fair Labor Standards Act (FLSA) requires the payment of a minimum wage, as well as overtime compensation at a rate of not less than one and one-half times an employee's hourly rate for hours worked in excess of a 40-hour workweek. While the FLSA exempts some employees from these requirements based on their job duties or because they work in specified industries, most employees must be paid in accordance with the statute's requirements for work performed. The increased use of personal data assistants (PDAs) and smartphones by employees outside of a traditional work schedule has raised questions about whether such use may be compensable under the FLSA. As PDAs and smartphones provide employees with mobile access to work email, clients, and co-workers, as well as the ability to create and edit documents outside of the workplace, it may be possible to argue that non-exempt employees who perform work-related activities with these devices should receive overtime if such activities occur beyond the 40-hour workweek. This report reviews the FLSA's overtime provisions and examines some of the U.S. Supreme Court's seminal decisions on work. Although PDAs and smartphones provide a new opportunity to consider what constitutes work for purposes of the FLSA, the Court's past FLSA decisions, including those involving on-call time, may provide guidance on how courts could evaluate overtime claims involving the new devices. Section 7(a)(1) of the FLSA, states, in relevant part, [N]o employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce, or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. The term "employ" is defined by the FLSA to mean "to suffer or permit to work." The term "work," however, is not defined by the statute. In 1944, the Supreme Court sought to clarify the meaning of that term in Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123 , a case involving miners who travelled daily to and from the working face of underground iron ore mines. Muscoda Local No. 123 and two other unions representing the miners maintained that the workers' hours of employment should include the travel time, and that the miners were entitled to overtime compensation because their hours of employment exceeded the statutory maximum workweek. Without a statutory definition for "work," the Court in Tennessee Coal relied on the plain meaning of the term to conclude that the miners' travel time should be construed as work or employment for purposes of the FLSA. The Court noted, "[W]e cannot assume that Congress here was referring to work or employment other than as those words are commonly used--as meaning physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business." The Court maintained that the dangerous conditions in the mine shafts provided proof that the journey to and from the working face involved continuous physical and mental exertion. In addition, the miners' travel to and from the working face was not undertaken for the convenience of the miners, but was performed for the benefit of the mining companies and their iron ore mining operations. In Armour v. Wantock , the Court clarified that actual physical or mental exertion was not necessary for an activity to constitute work under the FLSA. In Armour , a group of fire guards who remained on call on the employer's premises contended that they were entitled to overtime compensation for their on-call time. Although the employer attempted to make this time tolerable by providing beds, radios, and cooking equipment, the Court found that the guards were entitled to overtime compensation. The Court observed the following: Of course an employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen. Refraining from other activity often is a factor of instant readiness to serve, and idleness plays a part in all employments in a stand-by capacity. Readiness to serve may be hired, quite as much as service itself, and time spent lying in wait for threats to the safety of the employer's property may be treated by the parties as a benefit to the employer. Whether time is spent predominantly for the employer's benefit or for the employee's is a question dependent upon all the circumstances of the case. In Anderson v. Mt. Clemens Pottery , a 1946 case involving workers at a pottery plant and the computation of compensable work time, the Court concluded that time spent walking to a work area on the employer's premises after punching a time clock was compensable. The Court indicated that because the statutory workweek includes all time that an employee is required to be "on the employer's premises, on duty, or at a prescribed workplace," the time spent in these activities must be compensated. Other preliminary activities, such as putting on aprons and preparing equipment, were also found to be compensable because they were performed on the employer's premises, required physical exertion, and were pursued for the employer's benefit. At the same time, however, the Court in Mt. Clemens Pottery recognized "a de minimis rule" for activities that involve only a few seconds or minutes of work beyond an employee's scheduled work hours. The Court explained that "[i]t is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved." Fearing that Mt. Clemens Pottery would subject employers to significant and "wholly unexpected" financial liabilities, Congress passed the Portal-to-Portal Act, which abolished all claims for unpaid minimum wages and overtime compensation related to activities engaged in prior to May 14, 1947. The Portal-to-Portal Act also provided prospectively that an employer would not be subject to liability under the FLSA for failing to pay a minimum wage or overtime compensation for travel to and from the place where an employee's principal activity or activities are performed, or for activities that are "preliminary to or postliminary to [those] principal activity or activities." The Court's recognition of a de minimis rule and the enactment of the Portal-to-Portal Act have been viewed as attempts to limit the broad definition of "work" established in Tennessee Coal . Even after the Portal-to-Portal Act's enactment, however, the Court continued to find certain preparatory and concluding activities to be compensable under the FLSA. In Steiner v. Mitchell , for example, the Court found that the time spent by workers in a battery plant changing clothes at the beginning of a shift and showering at the end of a shift was compensable work time under the FLSA. Citing a colloquy between several senators and one of the sponsors of the Portal-to-Portal Act, the Court maintained that Congress did not intend to deprive employees of the benefits of the FLSA if preliminary or postliminary activities are an integral and indispensible part of the principal activities for which they are employed. In IBP v. Alvarez , the Court further concluded that the time spent walking between a changing area where protective clothing was put on and taken off and a work area was also compensable time under the FLSA. Whether non-exempt workers may be entitled to overtime compensation for work activities performed using a PDA or smartphone beyond a 40-hour workweek will probably depend on the facts of each case. At a minimum, an employee seeking such compensation will likely have to establish that he was engaged in compensable work. The factors articulated by the Court in Tennessee Coal continue to be recognized as a starting point for determining whether an employee's activities constitute work under the FLSA. First, does use of a PDA or smartphone require physical or mental exertion? Second, is the use of a PDA or smarthphone controlled or required by the employer? Finally, is the use of a PDA or smartphone necessarily and primarily for the benefit of the employer and his business? While the facts of each case will ultimately determine whether the Tennessee Coal factors are satisfied, it seems possible that at least some PDA or smartphone use could be viewed as compensable work under the FLSA. Even with the Court's reconsideration in Armour of the need for physical or mental exertion to constitute work, it appears reasonable to conclude that at least some PDA or smartphone use will require mental exertion. An employee responding to work email or reviewing or editing documents is arguably engaged in mental exertion. Further, providing PDAs and smartphones to non-exempt employees without any statement or policy about not using the devices outside of regular work hours may lead to the conclusion that their use is controlled or required by the employer, particularly if supervisors or senior employees send messages or documents with the expectation that they will be immediately read or reviewed. Finally, because employers could benefit from an employee's response to email or his review of a document after regular work hours, it could be argued that the employee's PDA or smartphone use is necessarily or primarily for the benefit of the employer and his business. The absence, however, of any significant case law involving the FLSA and PDA or smartphone use makes it difficult to know exactly how courts will evaluate related claims for overtime compensation. Some believe that cases involving on-call time could be instructive, particularly because they present an analogous situation in which an employee is kept in constant contact with the employer. In Skidmore v. Swift & Co ., one of the Court's early cases involving on-call time and the payment of overtime compensation, the Court indicated that the law does not preclude "waiting time from also being working time." The Court maintained, however, that the availability of overtime pay involves an examination of the agreement between the parties, consideration of the nature of the service provided and its relation to the waiting time, and all of the surrounding circumstances. In reversing a denial of overtime compensation in Skidmore , the Court further explained that whether on-call time should be considered compensable under the FLSA depends upon the degree to which the employee is free to engage in personal activities during periods of idleness when he is subject to call and the number of consecutive hours that the employee is subject to call without being required to perform active work. Hours worked are not limited to the time spent in active labor, but include time given by the employee to the employer. Since the Court's decision in Skidmore , other courts have found on-call time compensable under the FLSA. In Pabst v. Oklahoma Gas & Electric Co ., for example, the U.S. Court of Appeals for the Tenth Circuit determined that a group of electronic technicians who were expected to respond to alarms sent to their pagers and computers were entitled to compensation for their on-call time. Citing Skidmore and Armour , the court focused on the burdens placed on the technicians as a result of their on-call duties, such as diminished sleep habits because of the frequency of the alarms and the employer's required response time. Where the burdens placed on employees as a result of on-call duties are minimal, courts appear more likely to find that on-call time is not compensable under the FLSA. In Owens v. Local No. 169 , for example, the Ninth Circuit concluded that an employer with an ongoing policy of phoning its regular daytime mechanics after hours to return to the workplace to fix equipment was not liable for overtime compensation resulting from the employees' on-call duties. The court maintained that the employer's on-call policy was far less burdensome than other policies that had been successfully challenged. Unlike the technicians in Pabst , the mechanics in Owens were not required to respond to all calls and received an average of only six calls a year. The courts' focus on an employee's ability to engage in personal activities in on-call cases may indeed prove instructive as they begin to consider whether work-related PDA and smartphone use is compensable under the FLSA. Although a court may find that an employee's use of a PDA or smartphone is "work" for purposes of the FLSA, it may conclude that such use is so minimal or unobtrusive that it is not compensable under the FLSA. Such a finding would seem to be consistent not only with the on-call jurisprudence, but also with the de minimis rule articulated by the Court in Mt. Clemens Pottery . At the very least, a court will likely have to evaluate all of the circumstances of an employee's case to determine whether his PDA or smartphone use is compensable. As PDA and smartphone use by employees increases and the expectations of supervisors, co-workers, and clients evolve, it seems likely that courts will be confronted with numerous cases involving overtime compensation based on the work-related use of these devices. At least one case involving the retail sales consultants and assistant store managers of AT&T Mobility is currently being litigated. The non-exempt plaintiffs in Zivali v. AT&T Mobility are seeking overtime compensation for their work outside of their regular work hours. The employees argue that AT&T Mobility required them to carry company-owned smartphones and encouraged them to provide their numbers to customers. They contend that AT&T Mobility fosters a corporate culture in which employees "are expected to perform certain tasks off-duty." In May 2011, a federal district court found that the plaintiffs were not similarly situated for purposes of maintaining a collective action under the FLSA. However, the court also concluded that the evidence suggested that at least some of the plaintiffs might be able to recover uncompensated overtime from AT&T Mobility, and rejected the company's motion for summary judgment. The case is likely to be watched closely by both employers and employees who are required to carry PDAs and smartphones.

The increased use of personal data assistants (PDAs) and smartphones by employees outside of a traditional work schedule has raised questions about whether such use may be compensable under the Fair Labor Standards Act (FLSA). As PDAs and smartphones provide employees with mobile access to work email, clients, and co-workers, as well as the ability to create and edit documents outside of the workplace, it may be possible to argue that employees who are not exempt from the FLSA's requirements and who perform work-related activities with these devices should receive overtime if such activities occur beyond the 40-hour workweek. This report reviews the FLSA's overtime provisions, and examines some of the U.S. Supreme Court's seminal decisions on work. Although PDAs and smartphones provide a new opportunity to consider what constitutes work for purposes of the FLSA, the Court's past FLSA decisions, including those involving on-call time, may provide guidance on how courts could evaluate overtime claims involving the new devices.

A major issue in the upcoming farm bill debate is likely to be funding for conservation programs. Current authorization for mandatory funding for most of these programs, under the Farm Security and Rural Investment Act of 2002 ( P.L. 107 - 171 ), expires at the end of FY2007. Mandatory funding means that the amount authorized by Congress is available unless limited to smaller amounts in the appropriations process; if appropriators do not act, the amount that was authorized is provided to the program. These mandatory funds are provided by the U.S. Department of Agriculture's Commodity Credit Corporation, a financing institution for many agriculture programs, including commodity programs and export subsidies. While most conservation programs currently are authorized using mandatory funding, discretionary funding is used for six conservation programs. For discretionary programs, appropriators decide how much funding to provide each year in the annual agriculture appropriations bill, subject to any maximum limit set in law. Conservation program advocates prefer mandatory funding over discretionary funding. They believe that it is generally easier to protect authorized mandatory funding levels from reductions during the appropriations process than to secure appropriations each year. However, since FY2002, Congress has limited funding for some of the mandatory programs each year below authorized levels in annual appropriations acts. Advocates for these programs decry these limitations as significant changes from the intent of the farm bill, which compromise the programs' ability to provide the anticipated magnitude of benefits to producers and the environment. Others, including those interested in reducing agricultural expenditures or in spending the funds for other agricultural purposes, counter that, even with these reductions, overall funding has grown substantially. Congress provided mandatory funding for selected conservation programs for the first time in the 1996 farm bill ( P.L. 104 - 127 ). Prior to 1996, all conservation programs had been funded as discretionary programs. Conservation program advocates viewed mandatory funding as a much more desirable approach, and Congress agreed, enacting provisions that moved some conservation programs from discretionary to mandatory funding. Some advocates viewed this change in funding as a major achievement in the 1996 farm bill. Amounts authorized for these programs at the time may seem modest when compared with today's levels. Programs funded with mandatory funding, and their authorized levels under the 1996 law, included the following: Conservation Reserve Program (a maximum of 36.4 million acres at any time through FY2002, with no dollar amount specified); Wetland Reserve Program (a maximum of 975,000 acres at any time through FY2002, with no dollar amount specified); Environmental Quality Incentives Program ($130 million in FY1996, and $200 million annually thereafter through FY2002); Wildlife Habitat Incentives Program (a total of $50 million between FY1996 and FY2002); Farmland Protection Program (a total of $35 million with no time span specified); and Conservation Farm Option ($7.5 million in FY1997, increasing each year to a high of $62.5 million in FY2002). The 2002 farm bill greatly expanded mandatory funding for conservation, authorizing the annual funding levels shown in Table 1 . Mandatory funding was provided both for expiring programs that were reauthorized and for new programs created in the legislation. The increase in authorized funding levels was widely endorsed for many reasons. Conservation supporters had long been seeking higher funding levels, and this was another significant step in that effort. An argument that proved particularly persuasive in this farm bill debate was documentation of large backlogs of interested and eligible producers who were unable to enroll because of a lack of funds. Demand to participate in some of the programs exceeded the available program dollars several times over, and some Members reasoned that higher funding was warranted to satisfy this demand. Funding for FY2002 is not included in Table 1 , as the FY2002 appropriations legislation was enacted on November 28, 2001, six months before the 2002 farm bill. Program funding decisions had to be based on prior legislation. Indeed, by the time this farm bill was enacted, the FY2003 appropriations process was well along. However, the 2002 farm bill did authorize money in FY2002 for several mandatory programs. In each year since FY2002, annual agriculture appropriations acts have capped funding for some of the mandatory conservation programs below authorized levels. The programs that are limited and the amounts of the limitations change from year to year. One program, the Wetland Reserve Program, has been capped in enrolled acres, which appropriators translate into savings based on average enrollment costs. Table 1 compares the authorized spending level for each of the programs with the amount that Congress actually provided through the appropriations process. It does not include any mandatory conservation programs enacted since the 2002 farm bill, including the Conservation Reserve Program Technical Assistance Account (enacted in P.L. 108 - 498 ), the Healthy Forest Reserve (enacted in P.L. 108 - 148 ), and the Emergency Forestry Conservation Reserve Program (enacted in P.L. 109 - 148 ). Many of the spending reductions originate in the Administration's budget request. Since the farm bill states that the Secretary "shall" spend the authorized amounts for each program each year, Congress must act to limit spending to a lesser amount. The mix of programs and amounts of reduction in the Administration request have varied from year to year. Congress has concurred with the Administration request some years for some programs. Starting in FY2003, the requested reductions in mandatory funding below the authorized levels (shown in the table), are as follows: In FY2003, the request was submitted before the farm bill was enacted, and did not include any requests to reduce funding levels. In FY2004, the request was to limit the Wetlands Reserve Program (WRP) to 200,000 acres ($250 million), limit the Environmental Quality Incentives Program (EQIP) to $850 million, limit the Ground and Surface Water Program (GSWP) to $51 million, limit the Wildlife Habitat Incentive Program (WHIP) to $42 million, limit the Farmland Protection Program (FPP) to $112 million, limit the Conservation Security Program (CSP) to $19 million, and eliminate funding for the Watershed Rehabilitation and Agricultural Management Assistance (AMA) Programs. In FY2005, the request was to limit the WRP to 200,000 acres ($295 million), EQIP to $985 million, WHIP to $59 million, FPP to $120 million, and CSP to $209 million, and eliminate funding for the Watershed Rehabilitation and AMA Programs. In FY2006, the request was to limit the WRP to 200,000 acres ($321 million), EQIP to $1.0 billion, WHIP to $60 million, FPP to $84 million, Biomass Research and Development to $12 million, and CSP to $274 million, and eliminate funding for the Watershed Rehabilitation and AMA Programs. In FY2007, the request is to limit EQIP to $1.0 billion, GSWP to $51 million, WHIP to $55 million, FPP to $50 million, Biomass Research and Development to $12 million, and CSP to $342 million, and eliminate funding for the Watershed Rehabilitation and AMA Programs. While Congress has reduced funding for some mandatory conservation programs, either in support of an Administration request or on its own, the reductions did not exceed 10% of the total until FY2005. However, the gap between authorized levels and actual amounts continues to grow. As a percentage, this gap has grown from 2.4% of the total authorized amount in FY2003 to 12.7% in FY2006. Even with these changes, however, actual total funding has risen almost $720 million over the same four-year time period, which is an increase of almost 25% from the FY2003 authorization. Reductions have not been uniform among programs. The largest mandatory program, the CRP, has not been limited in any way by appropriators since the 2002 farm bill was enacted. The second-largest program, EQIP, has absorbed the largest reductions from authorized levels, totaling $396 million between FY2003 and FY2006. Funding for a third program, the CSP, has been amended four times since 2002. As initially enacted, it was the first true conservation entitlement program; that is, any individual who met the eligibility requirements would be accepted into the program. Congress has capped CSP and then repeatedly reduced the cap to fund other activities, usually disaster assistance. More generally, the table shows that reductions have varied from year to year and program to program since 2002. At one extreme, the Watershed Rehabilitation Program has received no mandatory funding in any year (it is one of the five conservation programs authorized to receive discretionary appropriations as well, and those have been provided), and at the other extreme, the CRP has not been limited in any way. Some of the programs have unusual characteristics that affect how they are treated for budget purposes, as noted in the table footnotes. For example, the Grasslands Reserve and Klamath River Basin Programs each have a total authorized level that is not subdivided by fiscal year in the authorizing legislation. For those programs, the amount that was spent each year (not the remaining lifetime authorization) is included for purposes of calculating the percentage by which funding is reduced. As a result of the many variations in how these programs are authorized (some in acres and others in dollars, and some as a total amount and others by year), there are several alternative ways to calculate the annual and total reduction from the authorized level. However, all of these calculations lead to the same general set of observations. First, overall funding for the suite of mandatory agriculture conservation programs has been reduced each year. Second, the magnitude by which this suite of programs is being reduced has been growing each year. Third, these reductions may still be significant to current or potential beneficiaries of those program. Fourth, even with the reductions, overall funding for the group of mandatory programs has continued to rise. Finally, funding for the discretionary agricultural conservation programs varies more from year to year, with much larger percentage reductions than the mandatory programs in some years. Greater variation in funding for discretionary programs supports the view of conservation proponents that using the mandatory approach has been a more successful and predictable approach to conservation program funding in recent years. (For more information on each of these programs, CRS Report RL32940, Agriculture Conservation Programs: A Scorecard , by [author name scrubbed] and [author name scrubbed] (pdf).) When considering whether reductions in mandatory funding for conservation programs compromise the conservation effort, three points are relevant. First, a measure of how conservation funding is viewed in relation to other agriculture funding was provided in the FY2006 reconciliation process, which required the agriculture committees to reduce total USDA mandatory program funding by $3.0 billion over five years, including a reduction of $176 million in FY2006. Conservation provided $934 million of those savings, with no reductions for FY2006. This amount is about 25% of the total reduction that was enacted, $3.7 billion over five years. The savings came from lowering caps on spending for CSP and EQIP in future years (which also required authorizing them beyond FY2007), and eliminating unspent funds for the Watershed Rehabilitation Program carried over from earlier years. Part of the debate was whether conservation is being asked to bear a disproportionate share of these reductions. (For more information, see CRS Report RS22086, Agriculture and FY2006 Budget Reconciliation , by [author name scrubbed] .) Second, it appears highly likely that reductions to mandatory program spending at the current scale will continue. Reductions have been in every administration request and annual appropriations bill since FY2003. It is less certain, however, whether these reductions will continue to grow as a percentage of the total. Future change will depend on both congressional support for conservation specifically, and broader pressures that influence overall federal spending. It is likely that the affected programs and the magnitude of the reductions will continue to vary from year to year, making it difficult to forecast the future based on the past. Third, supporters of conservation programs may look for ways to address the challenge of spending reductions in the next farm bill. However, several broader forces may make it difficult to authorize higher funding levels or to protect current funding levels for these conservation programs. One force may be broad efforts to control federal spending. A second force may be competition among various agriculture constituencies for limited funds; the FY2006 reconciliation process provided an indication of how Congress will treat conservation when it must make decisions based on this competition. A third force may be limits on the capacity of federal conservation agencies, at current staffing levels and with the current approaches, to plan and install all the conservation practices that additional funding would support, and it seems likely that increasing staff levels in federal agencies to provide more conservation will not be an option.

The Farm Security and Rural Investment Act of 2002 authorized large increases in mandatory funding for several agricultural conservation programs. Most of these programs expire in FY2007, and the 110th Congress is likely to address future funding levels in a farm bill. Since FY2002, Congress has acted, through the appropriations process, to limit funding for some of these programs below authorized levels. It limited total funding for all the programs to 97.6% of the authorized total in FY2003, and the percentage declined annually to 87.3% in FY2006. Program supporters decry these growing limitations as reductions that compromise the intent of the farm bill. Others counter that, even with the limitations, overall conservation funding has grown substantially, from almost $3.1 billion in FY2003 to almost $3.8 billion in FY2006. This report reviews the funding history of the programs since the 2002 farm bill was enacted. It will be updated periodically.

The level of pay for congressional staff is a source of recurring questions among Members of Congress, congressional staff, and the public. Members of the House of Representatives typically set the terms and conditions of employment for staff in their offices. This includes job titles, duties, and rates of pay, subject to a maximum level, and resources available to them to carry out their official duties. There may be interest in congressional pay data from multiple perspectives, including assessment of the costs of congressional operations; guidance in setting pay levels for staff in Member offices; or comparison of congressional staff pay levels with those of other federal government pay systems. Publicly available resources do not provide aggregated congressional staff pay data in a readily retrievable form. The most recent staff compensation report was issued in 2010, which, like previous compensation reports, relied on anonymous, self-reported survey data. Pay information in this report is based on the House Statement of Disbursements (SOD), published quarterly by the Chief Administrative Officer, as collated by LegiStorm, a private entity that provides some congressional data by subscription. Data in this report are based on official House reports, which afford the opportunity to use consistently collected data from a single source. Additionally, this report provides annual data, which allows for observations about the nature of House Member staff compensation over time. This report provides pay data for 12 staff position titles that are typically used in House Members' offices. The positions include the following: Caseworker Chief of Staff District Director Executive Assistant Field Representative Legislative Assistant Legislative Correspondent Legislative Director Office Manager Press Secretary Scheduler Staff Assistant House Member staff pay data for the years 2001-2015 were developed based on a random sampling of staff for each position in each year. In order to be included, House staff had to hold a position with the same job title in the Member's office for the entire calendar year. For each year, the SOD reports pay data for five time periods: January 1 and 2; January 3-March 31; April 1-June 30; July 1-September 30; and October 1-December 31. The aggregate pay of those five periods equals the annual pay of a congressional staff member. For each year, 2001-2015, a random sample of 45 staff for each position, and who did not receive pay from any other congressional employing authority, was taken. Every recorded payment ascribed to those staff for the calendar year is included. Data collected for this report may differ from an employee's stated annual salary due to the inclusion of overtime, bonuses, or other payments in addition to base salary paid in the course of a year. For some positions, it was not possible to identify 45 employees who held that title for the entire year. In circumstances when data for 18 or fewer staff were identified for a position, this report provides no data. Generally, data provided in this report are based on no more than three observations per Member office per year, and only one per office per position each year. Pay data for staff working in Senators' offices are available in CRS Report R44324, Staff Pay Levels for Selected Positions in Senators' Offices, FY2001-FY2014 . Data describing the pay of congressional staff working in House and Senate committee offices are available in CRS Report R44322, Staff Pay Levels for Selected Positions in House Committees, 2001-2014 , and CRS Report R44325, Staff Pay Levels for Selected Positions in Senate Committees, FY2001-FY2014 , respectively. There may be some advantages to relying on official salary expenditure data instead of survey findings, but data presented here are subject to some challenges that could affect the findings or their interpretation. Some of the concerns include the following: There is a lack of data for first-term Members in the first session of a Congress. Authority to use the Member Representational Allowance (MRA) for the previous year expires January 2, and new MRA authority begins on January 3. As a consequence, no data are available for first-term Members of the House in the first session of a Congress. Pay data provide no insight into the education, work experience, position tenure, full- or part-time status of staff, or other potential explanations for levels of compensation. Data do not differentiate between staff based in Washington, DC, district offices, or both. Member offices that do not utilize any of the 12 job position titles or their variants, or whose pay data were not reported consistently, are excluded. Potential differences could exist in the job duties of positions with the same title. Aggregation of pay by job title rests on the assumption that staff with the same title carry out similar tasks. Given the wide discretion congressional employing authorities have in setting the terms and conditions of employment, there may be differences in the duties of similarly titled staff that could have effects on their levels of pay. Tables in this section provide background information on House pay practices, comparative data for each position, and detailed pay data and visualizations for each position. Table 1 provides the maximum payable rates for House Member staff since 2001 in both nominal (current) and constant 2016 dollars. Constant dollar calculations throughout the report are based on the Consumer Price Index for All Urban Consumers (CPI-U) for various years, expressed in constant, 2016 dollars. Table 2 provides the available cumulative percentage changes in pay in constant 2016 dollars for each of the 12 positions, Members of Congress, and salaries paid under the General Schedule in Washington, DC, and surrounding areas. Table 3 - Table 14 provide tabular pay data for each House Member office staff position. The numbers of staff for which data were counted are identified as observations in the data tables. Graphic displays are also included, providing representations of pay from three perspectives, including the following: a line graph showing change in pay, 2001-2015, in nominal (current) and constant 2016 dollars; a comparison, at 5-, 10-, and 15- year intervals from 2015, of the cumulative percentage change in median pay for that position to changes in pay, in constant 2016 dollars, of Members of Congress and federal civilian workers paid under the General Schedule in Washington, DC, and surrounding areas; and distributions of 2015 pay in 2016 dollars, in $10,000 increments. Between 2011 and 2015, the change in median pay, in constant 2016 dollars, increased for one position, office manager, by 0.22%, and decreased for 11 staff positions, ranging from a -3.53% decrease for field representatives to a -25.83% decrease for executive assistants. This may be compared to changes over the same period to Members of Congress, -5.10%, and General Schedule, DC, -3.19%. Between 2006 and 2015, the change in median pay, in constant 2016 dollars, decreased for all 12 staff positions, ranging from a -1.99% decrease for legislative directors to a -24.82% decrease for executive assistants. This may be compared to changes over the same period to Members of Congress, -10.41%, and General Schedule, DC, -0.13%. Between 2001 and 2015, the change in median pay, in constant 2016 dollars, ranged from a 4.27% increase for chiefs of staff to a -23.35% decrease for executive assistants. Of the 12 positions, one saw a pay increase, while 11 saw declines. This may be compared to changes over the same period to the pay of Members of Congress, -10.40%, and General Schedule, DC, 7.36%.

The level of pay for congressional staff is a source of recurring questions among Members of Congress, congressional staff, and the public. There may be interest in congressional pay data from multiple perspectives, including assessment of the costs of congressional operations; guidance in setting pay levels for staff in Member offices; or comparison of congressional staff pay levels with those of other federal government pay systems. This report provides pay data for 12 staff position titles that are typically used in House Members' offices. The positions include the following: Caseworker, Chief of Staff, District Director, Executive Assistant, Field Representative, Legislative Assistant, Legislative Correspondent, Legislative Director, Office Manager, Press Secretary, Scheduler, and Staff Assistant. Tables provide tabular pay data for each House Member office staff position. Graphic displays are also included, providing representations of pay from three perspectives, including the following: a line graph showing change in pay, 2001-2015; a comparison, at 5-, 10-, and 15-year intervals from 2015, of the cumulative percentage change in pay of that position to changes in pay of Members of Congress and salaried federal civilian workers paid under the General Schedule in Washington, DC, and surrounding areas; and distributions of 2015 pay in $10,000 increments. In the past five years (2011-2015), the change in median pay, in constant 2016 dollars, increased for one position, office manager, by 0.22%, and decreased for 11 staff positions, ranging from a -3.53% decrease for field representatives to a -25.83% decrease for executive assistants. This may be compared to changes over the same period to Members of Congress, -5.10%, and General Schedule, DC, -3.19%. Pay data for staff working in Senators' offices are available in CRS Report R44324, Staff Pay Levels for Selected Positions in Senators' Offices, FY2001-FY2014. Data describing the pay of congressional staff working in House and Senate committee offices are available in CRS Report R44322, Staff Pay Levels for Selected Positions in House Committees, 2001-2014, and CRS Report R44325, Staff Pay Levels for Selected Positions in Senate Committees, FY2001-FY2014, respectively. Information about the duration of staff employment is available in CRS Report R44683, Staff Tenure in Selected Positions in House Committees, 2006-2016, CRS Report R44685, Staff Tenure in Selected Positions in Senate Committees, 2006-2016, CRS Report R44682, Staff Tenure in Selected Positions in House Member Offices, 2006-2016, and CRS Report R44684, Staff Tenure in Selected Positions in Senators' Offices, 2006-2016.

T he National Park Service's (NPS's) backlog of deferred maintenance (DM)--maintenance that was not done as scheduled or as needed--is an issue of ongoing interest to Congress. The agency estimated its DM needs for FY2016 at $11.332 billion. Although other federal land management agencies also have DM backlogs, NPS's backlog is the largest. Because unmet maintenance needs may damage park resources, compromise visitors' experiences in the parks, and jeopardize safety, NPS DM has been a topic of concern for Congress and for nonfederal stakeholders. Potential issues for Congress include, among others, how to weigh NPS maintenance needs against other financial demands within and outside the agency, how to ensure that NPS is managing its maintenance activities efficiently and successfully, and how to balance the maintenance of existing parks with the establishment of new park units. This report addresses frequently asked questions about NPS DM. The discussion is organized under the headings of general questions, funding-related questions, management-related questions, and questions on Congress's role in addressing the backlog. The Federal Accounting Standards Advisory Board defines deferred maintenance and repairs (DM&R) 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." NPS uses similar language to define deferred maintenance . Although NPS uses the term DM rather than DM&R, its estimates also include repair needs. Following NPS's usage, this report uses the term DM to refer to NPS's deferred maintenance and repair needs. Members of Congress and other stakeholders also often refer to DM as the maintenance backlog . As suggested by the above definition, DM does not include all maintenance, only maintenance that was not accomplished when scheduled or needed and was put off to a future time. Another type of maintenance is cyclic maintenance --that is, maintenance performed at regular intervals to prevent asset deterioration, such as to replace a roof or upgrade an electrical system at a scheduled or needed time. Although NPS considers cyclic maintenance separately from DM, NPS has emphasized the importance of cyclic maintenance for controlling DM costs. Cyclic maintenance, the agency has stated, "prevent[s] the creation of DM and enabl[es] repairs to fulfill their full life expectancy." NPS also performs routine, day-to-day maintenance as part of its facility operations activities. Such activities include, for example, mowing and weeding of landscapes and trails, weatherizing a building prior to a winter closure, and removing litter. NPS estimated its total DM for FY2016 at $11.332 billion. This amount is nearly evenly split between transportation-related DM in the "Paved Roads and Structures" category and mostly non-transportation-related DM for all other facilities (see Table 1 ). The Paved Roads and Structures category includes paved roadways, bridges, tunnels, and paved parking areas. The other facilities are in eight categories: Buildings, Housing, Campgrounds, Trails, Water Systems, Wastewater Systems, Unpaved Roads, and All Other. NPS also estimates annually a subset of DM that includes its highest-priority non-transportation-related facilities. For FY2016, DM for this subset of key facilities was estimated at $2.271 billion. NPS's estimated maintenance backlog increased for most of the past decade before dropping in FY2016. Over the decade as a whole (FY2007-FY2016), Figure 1 and Table 2 show a growth in NPS DM of $1.718 billion in nominal dollars and $0.021 billion in inflation-adjusted dollars. Multiple factors may contribute to growth or reduction in the NPS maintenance backlog, and stakeholders may disagree as to their respective importance. One key driver of growth in NPS maintenance needs has been the increasing age of agency infrastructure. Many agency assets--such as visitor centers, roads, utility systems, and other assets--were constructed by the Civilian Conservation Corps in the 1930s or as part of the agency's Mission 66 infrastructure initiative in the 1950s and 1960s. As these structures have reached or exceeded the end of their anticipated life spans, unfunded costs of repair or replacement have contributed to the DM backlog. Further, agency officials point out, as time goes by and needed repairs are not made, the rate at which such assets deteriorate is accelerated and can result in "a spiraling burden." Another key factor is the amount of funding available to the agency to address DM. The sources and amounts of NPS funding for DM are discussed in greater detail below, in the section on " Funding Questions ." NPS does not aggregate the amounts it receives and uses each year to address deferred maintenance, but agency officials have stated repeatedly that available funding has been inadequate to meet DM needs. In recent years, Congress has increased NPS appropriations to address DM, in conjunction with the agency's 2016 centennial anniversary. NPS has stated that these funding increases, although helping the agency with some of its most urgent needs, have been insufficient to address the total problem. Some observers have advocated further increases in agency funding as a way to address DM, whereas others have recommended reorienting existing funding to prioritize maintenance over other purposes. The Administration's budget request for FY2018 would reduce some NPS funding for DM while increasing other NPS DM-oriented funding. Another subject of attention is the extent to which acquisition of new properties may add to the maintenance burden. Stakeholders disagree about the role played by new assets acquired by NPS, through the creation of new parks or the expansion of existing parks, in DM growth over the past decade. To the extent that newly acquired lands contain assets with maintenance and repair needs that are not met, these additional assets would increase NPS DM. According to the agency, new additions with infrastructure in need of maintenance and repair have been relatively rare in recent years, and most of the acquired lands have been unimproved or have contained assets in good condition. In past years, NPS also has stated that some acquisitions of "inholdings" within existing parks have even facilitated maintenance and repair efforts by providing needed access for maintenance activities. Others have contended that even if new acquisitions do not immediately contribute to the backlog, they likely will do so over time, and that further expansion of the National Park System is inadvisable until the maintenance needs of existing properties have been addressed. For example, the Administration's FY2018 budget proposes to eliminate funding for NPS federal land acquisition projects in order to "focus fiscal resources toward managing lands already owned by the federal government." Some observers also have expressed concerns that growth in NPS DM may be at least partially due to inefficiencies in the agency's asset management strategies and/or the implementation of these strategies. The section of this report on " Management Questions " gives further details on NPS's management of its DM backlog. NPS has taken a number of steps over the decade to improve its asset management systems and strategies. The Government Accountability Office (GAO) has recommended further improvements. From year to year, the completion of individual projects, changes in construction and repair costs, and similar factors play a role in the growth or reduction of NPS DM. For instance, with respect to the reduction in NPS DM for FY2016, the agency stated: The database used to track DM and other facility asset information changes daily as data is entered, updated, closed out, and corrected in the system. The "snapshot" of the data taken at the end of Fiscal Year (FY) 2016 is exactly that ... a view of the NPS data as of Sep 30, 2016. Many factors contributed to this almost $600 million decrease, including data cleanup, completion of several large projects, revisions to several large project work orders, and savings from decreases in construction costs. Still another issue is that the methods used by NPS and the Department of the Interior (DOI) to estimate DM have varied over time and for different types of maintenance reports. For example, the estimates in Figure 1 and Table 2 , above, draw on two different types of DM reports. For FY2006-FY2013, the estimates are calculated from DM ranges that NPS provided to DOI for annual departmental financial reports. Starting in FY2014, NPS began to publish separate estimates of agency DM on its website, which include some assets--such as buildings that NPS maintains but does not own--that are not included in the DOI departmental estimates. Additionally, during the earlier FY2006-FY2013 period, DOI changed its methods for calculating its estimated DM ranges, and NPS was in the process of completing its database of reported assets. What portion of the overall change in NPS DM over the decade may be attributable to changes in methodology or data completeness, rather than to other factors, is unclear. Although all four major federal land management agencies--NPS, the Bureau of Land Management (BLM), the Fish and Wildlife Service (FWS), and the Forest Service (FS)--have DM backlogs, NPS's backlog is the largest. For FY2016, NPS reported DM of more than $11 billion, whereas FS reported DM of roughly half that amount (about $5.5 billion), and FWS and BLM both reported DM of less than $2 billion. DM for the four agencies is discussed further in CRS Report R43997, Deferred Maintenance of Federal Land Management Agencies: FY2007-FY2016 Estimates and Issues . NPS reports DM by state and territory in its report titled NPS Deferred Maintenance by State and Park . The 20 states with the highest NPS DM estimates are shown in Table 3 . The states with the highest DM are not necessarily those with the most park acreage. For example, Alaska contains almost two-thirds of the total acreage in the National Park System but accounts for less than 1% of the agency's DM backlog. Instead, the amount, type, and condition of infrastructure in a state's national park units are the primary determinants of DM for each state. For example, transportation assets are a major component of NPS DM, and states with NPS national parkways--the George Washington Memorial Parkway (mainly in Virginia and Washington, DC), the Natchez Trace Parkway (mainly in Mississippi and Tennessee), the Blue Ridge Parkway (North Carolina and Virginia), and the John D. Rockefeller Jr. Memorial Parkway (Wyoming)--are all among the 20 states with the highest DM. Table 4 shows the 20 individual park units with the highest maintenance backlogs. Various factors may contribute to the relatively high DM estimates for these park units as compared to others. For example, many of them are older units whose infrastructure was largely built in the mid-20 th century. Some sites, such as Gateway National Recreation Area and Golden Gate National Recreation Area, are located in or near urban areas and may contain more buildings, roads, and other built assets than more remotely located parks. Three of the 10 units with the highest estimated DM are national parkways, consistent with the high proportion of NPS's overall DM backlog that is related to road needs. It is not possible to determine the total amount of funding allocated each year to address NPS's DM backlog, because NPS does not aggregate these amounts in its budget reporting. Funding to address DM comes from a variety of NPS budget sources, and each of these budget sources also funds activities other than DM. NPS does not report how much of each funding stream was used for DM in any given year. Although it is not possible to determine amounts allocated to NPS deferred maintenance, GAO estimated amounts allocated for all NPS maintenance (including DM, cyclic maintenance, and day-to-day maintenance activities) for FY2006-FY2015. GAO estimated that, over that decade, NPS's annual spending for all types of maintenance averaged $1.182 billion per year. GAO did not determine what portion of this funding went specifically to DM. NPS has testified that annual funding of roughly $700 million per year, targeted specifically to DM, would be required simply to hold the maintenance backlog steady without further growth. NPS has used discretionary appropriations, allocations from the Department of Transportation, park entrance fees, donations, and other funding sources to address the maintenance backlog. Most of the funding for DM comes from discretionary appropriations, primarily under two budget activities, titled "Repair and Rehabilitation" and "Line-Item Construction." The Repair and Rehabilitation (R&R) budget subactivity, within the NPS's Operation of the National Park System (ONPS) budget account, focuses on large-scale, nonrecurring repair needs, and repairs for assets where scheduled maintenance is no longer sufficient to improve the condition of the facility. R&R funds are used for projects with projected costs of less than $1 million each. NPS estimated that, over the past five years, a range from 49% to 83% of R&R funds have been specifically targeted to projects on the DM backlog, as opposed to projects associated with other types of maintenance. The Administration's FY2018 budget would fund the R&R subactivity at $99.3 million, a decrease of $25.2 million from FY2017 appropriations provided in P.L. 115-31 . The Line- Item Construction budget activity, within the NPS's Construction account, provides funding for the construction, major rehabilitation, and replacement of existing facilities needed to accomplish approved management objectives for each park. This funding is used for projects expected to cost $1 million or more. NPS prioritizes projects for funding on the basis of their contribution to parks' financial sustainability, health and safety, resource protection, and visitor services, as well as on the basis of a cost-benefit analysis. NPS estimated that, over the past five years, a range from 59% to 87% of Line-Item Construction funds have been used specifically to reduce the DM backlog. The Administration's FY2018 budget would fund the Line-Item Construction activity at $137.0 million, an increase of $5.0 million over FY2017 appropriations provided in P.L. 115-31 . Portions of other NPS discretionary budget activities and accounts also are used for DM. These include various budget activities within the ONPS and Construction accounts, as well as NPS's Centennial Challenge account. The Centennial Challenge account provides federal funds to match outside donations for "signature" NPS parks and programs. The funding is used to enhance visitor services, reduce DM, and improve natural and cultural resource protection. The Administration's FY2018 budget justification requests $15.0 million for the Centennial Challenge program, a decrease of $5.0 million from the amount provided for FY2017 in P.L. 115-31 . Beyond NPS discretionary appropriations, a number of other, nondiscretionary agency revenue streams also are used partially or mainly to address DM. NPS receives an annual allocation from the Highway Trust Fund to address transportation needs, including transportation-related DM. Funds are provided to NPS (and other federal land management agencies) by the Federal Highway Administration, primarily under the Federal Lands Transportation Program. In recent years, these allocations have funded approximately two-thirds of NPS's transportation-related maintenance spending. For FY2018, NPS's allocation from the Federal Lands Transportation Program is $284.0 million, an increase of $8.0 million from the FY2017 allocation. Through related federal highway programs, NPS could potentially receive additional funding. Park entrance and recreation fees collected under the Federal Lands Recreation Enhancement Act (16 U.S.C. SSSS6801-6814) may be used for DM, among other purposes. The fees, most of which are retained at the collecting parks, may be used for a variety of purposes benefiting visitors, including facility maintenance and repair, interpretation and visitor services, law enforcement, and others. NPS estimates entrance and recreation fee collections of $256.9 million for FY2017 and $259.5 million for FY2018. NPS collects concessions franchise fees from park concessioners who provide services such as lodging and dining at park units. The fees, collected under the National Park Service Concessions Management Improvement Act of 1998 (54 U.S.C. SSSS101911 et seq.), are available for use without further appropriation and are mainly retained at the collecting parks. They may be used to reduce DM, among other purposes, with priority given to concessions-related DM. NPS estimates concessions franchise fee collections of $127.8 million for FY2017 and $131.3 million for FY2018. The National Park Service Centennial Act ( P.L. 114-289 ) established the NPS Centennial Challenge Fund . In addition to discretionary appropriations (discussed above), the fund is authorized to receive, as offsetting collections, certain amounts from the sales of entrance passes to seniors. NPS estimates that the senior pass sales will provide an additional $15.0 million for the account for FY2018 on top of discretionary appropriations. The funding may be used for a variety of projects but must prioritize DM, improvements to visitor services facilities, and trail maintenance. Federal funds must be matched by nonfederal donations on at least a 50:50 basis. The Centennial Act also established the NPS Second Century Endowment and directed that it receive, as offsetting collections, revenues from senior pass sales totaling $10 million annually. The endowment also is authorized to receive gifts, devises, and bequests from donors. The funds may be used for projects approved by the Secretary of the Interior that further the purposes of NPS, including projects on the maintenance backlog. More broadly, other types of d onations to NPS may be used for projects that reduce DM, among a variety of other purposes. NPS estimated that, through all of these programs combined, the agency would receive donations of $75.0 million in FY2017 and $71.0 million in FY2018 (in addition to the revenues generated from the sales of the senior passes). Under the Helium Stewardship Act of 2013 ( P.L. 113-40 ), NPS will receive $20 million in FY2018 from proceeds from the sale of federal helium, to be used for DM projects requiring a minimum 50% match from a nonfederal funding source. Other NPS mandatory appropriations also have been partially used for DM. These include monies collected under the Park Building Lease and Maintenance Fund, transportation fees collected under the Transportation Systems Fund, and rents and payroll deductions for the use and occupancy of government quarters, among others. NPS estimated varying amounts for these mandatory appropriations for FY2017 and FY2018. Some Members of Congress and other stakeholders have proposed sources of additional funding to address NPS's DM needs. Legislative proposals in the 115 th Congress are discussed in the " Role of Congress " section, below. Among other sources, stakeholders have proposed to increase NPS DM funding with resources from the Land and Water Conservation Fund, offshore oil and gas revenues that currently go to the General Treasury, income tax overpayments and contributions, motorfuel taxes, and coin and postage stamp sales. By contrast, others have suggested that NPS DM could be reduced without additional funding--for example, by improving the agency's capital investment strategies, increasing the role of nonfederal partners in park management, or disposing of assets. NPS uses computerized maintenance management systems to prioritize its DM projects. Agency staff at each park perform condition assessments that document the condition of park assets according to specified maintenance standards. The information is collected in a software system through which the agency assigns to each asset a facility condition index (FCI) rating--a ratio representing the cost of DM for the asset divided by the asset's replacement value. (A lower FCI rating indicates a better condition.) The agency also assigns an asset priority index (API) rating that assesses the importance of the asset in relation to the park mission. Projects are prioritized based on their FCI and API ratings, as well as on other criteria related to financial sustainability, resource protection, visitor use, and health and safety. The agency's scoring system aligns with criteria identified in its Capital Investment Strategy. In addition to the funding challenges discussed earlier, NPS faces other issues in managing the maintenance backlog. In December 2016, GAO reported on NPS management of maintenance activities, and identified both successes and challenges. In terms of challenges, GAO reported that competing duties often make it difficult for park staff to perform facility condition assessments in a timely manner, that the remote location of some assets contributes to this difficulty, that the agency's focus on high-priority assets likely may lead to continued deterioration of lower-priority assets, and that NPS lacks a process for verifying that its Capital Investment Strategy is producing the intended outcomes. GAO also reported on successes in NPS asset management--for example, that the agency's assessment tools are consistent with federally prescribed standards and that it is working with partners and volunteers to address maintenance needs. An additional challenge, identified in NPS budget documents, relates to the disposal of unneeded assets to reduce the agency's maintenance burden. Part of NPS's asset management includes identifying assets that may be candidates for disposal. For example, some assets may have high FCI ratings, indicating expensive maintenance needs, along with low API ratings, indicating that they are not of high importance to the NPS mission. NPS may favor destroying or disposing of such assets, but the agency has stated that the cost of removing the assets often precludes the use of this option. GAO also identified that legal requirements--such as the requirement in the McKinney-Vento Homeless Assistance Act ( P.L. 100-77 , as amended) that federal buildings slated for disposal must be assessed for their potential to provide homeless assistance before being disposed of by other means--create additional obstacles for NPS disposal of unneeded properties. Congress has addressed NPS's maintenance backlog through oversight, funding, and legislation. For example, in the 115 th Congress, both the House and the Senate have held oversight hearings to investigate options for addressing NPS DM. Annual appropriations for NPS are discussed in CRS Report R42757, National Park Service: FY2017 Appropriations and Ten-Year Trends . Several recent laws and proposals outside of annual appropriations, including the National Parks Centennial Act of 2016 and bills introduced in the 115 th Congress, are discussed under the following questions. The National Parks Centennial Act ( P.L. 114-289 ), enacted in December 2016, contained a variety of provisions aimed at addressing the NPS maintenance backlog as well as meeting other park goals. The law created two funds that may be used to reduce DM--the National Park Centennial Challenge Fund and the Second Century Endowment for the National Park Service. Both funds receive federal monies from the sale of senior recreation passes, as well as donations. DM projects are a prioritized use of the Centennial Challenge Fund and are among the potential uses of endowment funds. The law also made changes to extend eligibility for the Public Land Corps and increase the authorization of appropriations for the Volunteers in the Parks program. Participants in these programs perform a variety of duties that help address DM, among other activities. In addition, the law authorized appropriations of $5.0 million annually for FY2017-FY2023 for the National Park Foundation to match nonfederal contributions. Contributions to the foundation are used for a variety of NPS projects and programs, including projects on the maintenance backlog. Bills in the 115 th Congress related to NPS deferred maintenance include the following. H.R. 1577 , the National Park Service Transparency and Accountability Act, would require the Secretary of the Interior to submit to Congress a report evaluating the NPS's Capital Investment Strategy and its results, including a determination of whether the strategy is achieving its intended outcomes and any recommendations for changes. H.R. 2584 / S. 751 , the National Park Service Legacy Act of 2017, would establish a National Park Service Legacy Restoration Fund with funding from mineral revenues. Annual amounts deposited into the fund would begin at $50.0 million for FY2018-FY2020 and would rise gradually to $500.0 million for FY2027-FY2047. The funds would be available to NPS for expenditure without further appropriation. They would be used for "high-priority deferred maintenance needs of the Service," with 20% of the funding going to transportation-related maintenance and the remaining 80% going to repair and rehabilitation of non-transportation-related assets. Projects with a nonfederal cost share would receive special treatment in priority rankings. The funding could not be used for land acquisition, and it could not supplant discretionary funding for NPS facility operations and maintenance. H.R. 2863 , the Land and National Park Deferred Maintenance (LAND) Act, would establish a National Park Service Maintenance and Revitalization Conservation Fund. The fund would receive $450.0 million each year from mineral revenues, of which $375.0 million would go to NPS, with $25.0 million going to each of three other agencies: FWS, BLM, and FS. The monies would be available for expenditure without further appropriation and would be used for "high priority deferred maintenance needs that support critical infrastructure and visitor services." Funds could not be used for land acquisition. S. 1460 , Section 5101, would establish a National Park Service Maintenance and Revitalization Conservation Fund as part of a broader energy-modernization bill. Although the fund would have the same name as in H.R. 2863 , the Senate version would provide for deposits to the fund of $150.0 million per year from offshore revenues collected under the Outer Continental Shelf Lands Act (43 U.S.C. 1338 et seq.). The funds would be available for expenditure only when appropriated by Congress. The monies would be used for "high-priority deferred maintenance needs of the Service that support critical infrastructure and visitor services" and could not be used for land acquisition.

This report addresses frequently asked questions about the National Park Service's (NPS's) backlog of deferred maintenance--maintenance that was not performed as scheduled or as needed and was put off to a future time. NPS's deferred maintenance, also known as the maintenance backlog, was estimated for FY2016 at $11.332 billion. More than half of the NPS backlog is in transportation-related assets. Other federal land management agencies also have maintenance backlogs, but NPS's is the largest and has drawn the most congressional attention. During the past decade (FY2007-FY2016), NPS's maintenance backlog grew steadily before decreasing in FY2016. Overall, the deferred maintenance estimate grew by an estimated $1.718 billion in nominal dollars and $0.021 billion in inflation-adjusted dollars over the decade. Many factors might contribute to growth or reduction in deferred maintenance, including the aging of NPS assets, the availability of funding for NPS maintenance activities, acquisitions of new assets, agency management of the backlog, completion of individual projects, changes in construction and related costs, and changes in measurement and reporting methodologies. The backlog is distributed unevenly among states and territories, with California, the District of Columbia, and New York having the largest amounts of deferred maintenance. The amounts also vary among individual park units. Sources of funding to address NPS deferred maintenance include discretionary appropriations, allocations from the Department of Transportation, park entrance and concessions fees, donations, and others. It is not possible to determine the total amount of funding from these sources that NPS has allocated each year to address deferred maintenance, because NPS does not aggregate these amounts in its budget reporting. NPS prioritizes its deferred maintenance projects based on the condition of assets and their importance to the parks' mission, as well as other criteria related to financial sustainability, resource protection, visitor use, and health and safety. NPS has taken a number of steps over the decade to improve its asset management systems and strategies. Some observers, including the Government Accountability Office (GAO), have recommended further improvements. Some Members of Congress and other stakeholders have proposed new sources of funding to address NPS's deferred maintenance needs. Bills in the 115th Congress to increase NPS funding for deferred maintenance--including H.R. 2584, H.R. 2863, S. 751, and S. 1460--would draw from mineral revenues currently going to the Treasury. Other proposed funding sources have included monies from the Land and Water Conservation Fund, income tax overpayments and contributions, new motorfuel taxes, and coin and postage stamp sales. Other stakeholders have suggested that NPS deferred maintenance could be reduced without additional funding--for example, by improving the agency's capital investment strategies or increasing the role of nonfederal partners in park management. H.R. 1577 would require the Secretary of the Interior to evaluate NPS's Capital Investment Strategy and report on any recommended changes.

The earned income tax credit (EITC), when first enacted in 1975, was a modest tax credit providing financial assistance to low-income working families with children. (It was also initially a temporary tax provision.) Today, the EITC is one of the federal government's largest antipoverty programs, having evolved through a series of legislative changes over the past 40 years. Since the EITC's enactment, Congress has shown increasing interest in using refundable tax credits for a variety of purposes, from reducing the tax burdens of families with children (the child tax credit), to helping families afford higher education (the American opportunity tax credit), to subsidizing health insurance premiums (the premium assistance tax credit). The legislative history of the EITC may provide context to current and future debates about refundable tax credits. The report first provides a general overview of the current credit. The report then summarizes the key legislative changes to the credit and provides analysis of some of the congressional intentions behind these changes. An overview of the current structure of the EITC can be found in Appendix A at the end of this report. For more information about the EITC, see CRS Report R43805, The Earned Income Tax Credit (EITC): An Overview . Major legislative changes to the EITC over the past 40 years can generally be categorized in one of two ways: those that increased the amount of the credit by changing the credit formula or those that changed eligibility rules for the credit, either expanding eligibility to certain workers (for example, certain servicemembers) or denying the credit to others (for example, workers not authorized to work in the United States). Together, these changes reflect congressional intent to expand this benefit while also better targeting it to certain recipients. A summary of some of the major changes to the EITC can be found in Table 1 . A summary of the growth in the EITC in terms of both the amount of the credit and the number of claimants over time can be found in Figure 1 , which includes the dates of key legislative changes to the credit. The origins of the EITC can be found in the debate in the late 1960s and 1970s over how to reform welfare--known at the time as Aid to Families with Dependent Children (AFDC). During this time, there was increasing concern over the growing numbers of individuals and families receiving welfare. In 1964, fewer than 1 million families received AFDC. By 1973, the AFDC rolls had increased to 3.1 million families. Some policymakers were interested in alternatives to cash welfare for the poor. Some welfare reform proposals relied on the "negative income tax" (NIT) concept. The NIT proposals would have provided a guaranteed income to families who had no earnings (the "income guarantee" that was part of these proposals). For families with earnings, the NIT would have been gradually reduced as earnings increased. Influenced by the idea of a NIT, President Nixon proposed in 1971 the "family assistance plan" (FAP) that "would have helped working-poor families with children by means of a federal minimum cash guarantee." Senator Russell Long, then chairman of the Senate Finance Committee, did not support FAP because it provided "its largest benefits to those without earnings" and would, in his opinion, discourage people from working. Instead, Senator Long proposed a "work bonus" plan that would supplement the wages of poor workers. Senator Long stated that his proposed "work bonus plan" was "a dignified way" to help poor Americans "whereby the more he [or she] works the more he [or she] gets." Senator Long also believed his "work bonus plan" would "prevent the social security tax from taking away from the poor and low-income earners the money they need for support of their families." The "work bonus plan" proposal was passed by the Senate in 1972, 1973, and 1974, but the House did not pass it until 1975. The "work bonus plan" was renamed the earned income tax credit and was enacted on a temporary basis as part of the Tax Reduction Act of 1975 ( P.L. 94-12 ). As originally enacted, the credit was equal to 10% of the first $4,000 in earnings. Hence, the maximum credit amount was $400. The credit phased out between incomes of $4,000 and $8,000. The credit was originally a temporary provision that was only in effect for one year, 1975. In addition to encouraging work and reducing dependence on cash welfare, the credit was also viewed as a means to encourage economic growth in the face of the 1974 recession and rising food and energy prices. As the Finance Committee Report on the Tax Reduction Act of 1975 stated: This new refundable credit will provide relief to families who currently pay little or no income tax. These people have been hurt the most by rising food and energy costs. Also, in almost all cases, they are subject to the social security payroll tax on their earnings. Because it will increase their after-tax earnings, the new credit, in effect, provides an added bonus or incentive for low-income people to work, and therefore, should be of importance in inducing individuals with families receiving Federal assistance to support themselves. Moreover, the refundable credit is expected to be effective in stimulating the economy because the low-income people are expected to spend a large fraction of their disposable incomes. The same report also emphasized that the EITC's prime objective should be "to assist in encouraging people to obtain employment, reducing the unemployment rate, and reducing the welfare rolls." One indication of the extent to which this credit was meant to replace cash welfare was that the bill had originally included a provision that would have required states to reduce cash welfare by an amount equal to the aggregate EITC benefits received by their residents. This provision was ultimately dropped in the conference committee. In addition, since the EITC was viewed in part as an alternative to cash welfare, it was generally targeted to the same recipients--single mothers with children. (Childless low-income adults would not receive the EITC until the 1990s, discussed subsequently.) The credit was extended several times before being made permanent by the Revenue Act of 1978 ( P.L. 95-600 ). This law also increased the maximum amount of the credit to $500. In summary materials of that bill, the Joint Committee on Taxation (JCT) stated that the credit was made permanent because "Congress believed that the earned income credit is an effective way to provide work incentives and relief from income and Social Security taxes to low-income families who might otherwise need large welfare payments." The modest increase in the amount of the credit in 1978 was seen as a way to take into account the increase in the cost of living since 1975 (the credit was not adjusted for inflation). Subsequent increases in the amount of the credit in 1984 ( P.L. 98-369 ) and 1986 ( P.L. 99-514 ) were also viewed as a way to adjust the credit for cost-of-living increases, as well as increases that had occurred to Social Security taxes. (The 1986 law also permanently adjusted the credit annually for inflation going forward.) In the early 1990s, legislative changes again increased the amount of the EITC. Eligibility for the credit was also expanded to include childless workers. Several years later, in light of concerns related to the increasing cost of the EITC, as well as concerns surrounding noncompliance, additional changes were made to the credit with the intention of reducing fraudulent claims, better targeting benefits, and improving administration. Over time, policymakers began to turn to the EITC as a tool to achieve another goal: poverty reduction. A 1989 Wall Street Journal article described the EITC as "emerging as the antipoverty tool of choice among poverty experts and politicians as ideologically far apart as Vice President Dan Quayle and Rep. Tom Downey, a liberal New York Democrat." Unlike other policies targeted to low-income workers, like the minimum wage, the EITC was viewed by some as better targeted to the working poor with children. In addition, unlike creating a new means-tested benefit program, the EITC was administered by the IRS. This may have appealed to some policymakers who did not wish to create additional bureaucracy when administering poverty programs. In order to function more as a poverty reduction tool, the formula used to calculate the credit was modified. As previously discussed, the EITC as originally designed did not vary by family size. Thus, as family size increased, the credit became less effective at helping families meet their needs. The EITC was restructured to vary based on family size beginning with the Omnibus Reconciliation Act of 1990 (OBRA90; P.L. 101-508 ) and greatly expanding with the Omnibus Reconciliation Act of 1993 (OBRA93, P.L. 103-66 ). Specifically, following these legislative changes, the EITC was calculated such that at any given level of earnings, the credit was one size for a taxpayer with one child and larger for taxpayers with two or more children. OBRA93 also--for the first time--extended the credit to childless workers. Unlike the expansion of the credit to workers with more than one child, the main rationale for this "childless EITC" was not poverty reduction. Instead the credit was intended to partly offset a gasoline tax increase included in OBRA93. The credit for childless workers was smaller than the credit for individuals with children--a maximum of $323 as opposed to $2,152 for those with one child and $3,556 for those with two or more children in 1996. The childless EITC was also only available to adults aged 25 to 64 who were not claimed as dependents on anyone's tax return. Notably, aside from inflation adjustments, the formulas for the childless EITC and the EITC for individuals with one or two children have remained unchanged since OBRA93. Other legislation passed later in the 1990s--The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA; P.L. 104-193 ) and the Taxpayer Relief Act of 1997 ( P.L. 105-34 )--included modifications to the EITC intended to reduce fraud, limit eligibility to individuals authorized to work in the United States, prevent certain higher-income taxpayers from claiming the credit, and improve administration of the credit. Before and during consideration of PRWORA, Congress was increasingly concerned with the rising cost of the credit. Some policymakers attributed the increasing cost of the program to the significant legislative expansions that had occurred earlier in the decade and the expansion of EITC eligibility to childless workers. In addition, there were concerns, as Speaker of the House Newt Gingrich stated, that "as the EITC becomes more generous, it invite[s] fraud and abuse." A 1994 GAO report had identified significant amounts of the credit claimed in error. Other policymakers were concerned that the credit was available to certain higher-income taxpayers--specifically those with little earned income, but significant unearned income (like interest income, dividends, and rent and royalty income). Finally, "Congress did not believe that individuals who are not authorized to work in the United States should be able to claim the credit." Ultimately, PRWORA addressed these concerns by "tighten[ing] compliance tax rules and mak[ing] it harder for some people to qualify for the credit." These changes included expanding the definition of "investment income" above which an individual would be ineligible for the credit, expanding the definition of income used to phase out the credit so certain taxpayers with capital losses would be ineligible for the credit, and denying the EITC to individuals who did not provide an SSN for work purposes. One year after PRWORA, Congress modified the EITC again with the intention of both improving administration and further limiting the ability of certain higher-income taxpayers to claim the credit. The Taxpayer Relief Act of 1997 (TRA97; P.L. 105-34 ) created penalties for taxpayers who claimed the credit incorrectly, including denying the credit to individuals for 10 years if they claimed the credit fraudulently, that were intended to improve administration of the credit. And if after this period of time, the taxpayer ultimately was eligible for the credit and wished to claim it, they would need to provide the IRS with additional information (as established by the Treasury) to prove eligibility. According to the JCT, these new penalties were enacted because "Congress believed that taxpayers who fraudulently claim the EITC or recklessly or intentionally disregard EITC rules or regulations should be penalized for doing so." In addition, TRA97 included new requirements of paid tax preparers that were also meant to improve administration and reduce errors. Finally, TRA97 expanded the definition of income used in phasing out the credit, by including additional categories of passive (i.e., unearned) income. The rationale for this change, according to the JCT, was that "Congress believed that the definition of AGI used currently [prior to TRA97] in phasing out the credit [was] too narrow and disregard[ed] other components of ability-to-pay." In the 2000s, additional changes to the EITC credit formula were enacted by Congress. These legislative changes expanded the credit for certain recipients--namely married couples and larger families. At the beginning of 2000, there was bipartisan congressional interest in reducing tax burdens of married couples generally (although the means by which they intended to achieve this goal varied). For low-income taxpayers with little or no tax liability, a marriage penalty is said to occur when the refund the married couple receives is smaller than the combined refund of each partner filing as unmarried. (Marriage bonuses also arise in the U.S. federal income tax code. ) In 2001, the JCT identified the structure of the EITC as one of the primary causes of the marriage penalty among low-income taxpayers. Specifically, the JCT found that the phaseout range of the credit and its variation based on number of children could result in smaller credits among married EITC recipients than the combined credits of two singles. As the JCT stated in 2001, Because the [earned income credit] EIC increases over one range of income and then is phased out over another range of income, the aggregation of incomes that occurs when two individuals marry may reduce the amount of EIC for which they are eligible. This problem is particularly acute because the EIC does not feature a higher phase out range for married taxpayers than for heads of households. Marriage may reduce the size of a couple's EIC not only because their incomes are aggregated, but also because the number of qualifying children is aggregated. Because the amount of EIC does not increase when a taxpayer has more than two qualifying children, marriages that result in families of more than two qualifying children will provide a smaller EIC per child than when their parents were unmarried. Even when each unmarried individual brings just one qualifying child into the marriage there is a reduction in the amount of EIC per child, because the maximum credit for two children is generally less than twice the maximum credit for one child. The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16 ) reduced the EITC marriage penalty by increasing the income level at which the credit phased out for married couples. This "marriage penalty relief" was scheduled to gradually increase to $3,000 by 2008. In 2009, the American Recovery and Reinvestment Act (ARRA; P.L. 111-5 ) temporarily increased EITC marriage penalty relief to $5,000. In addition to expanding marriage penalty relief, ARRA also temporarily created a larger credit for families with three or more children by increasing the credit rate for these families from 40% to 45%. A larger credit rate of 45% (as opposed to 40%), while leaving other EITC parameters unchanged (earned income amount and phaseout threshold), resulted in a larger credit for families with three or more children. These two ARRA modifications to the EITC were originally enacted as part of legislation meant to provide temporary economic stimulus. There was debate surrounding whether these temporary modifications should be further extended. After these changes were enacted in 2009, the Obama Administration proposed making these provisions permanent as part of its budget proposals. , During negotiations on the "fiscal cliff" legislation at the end of 2012 (The American Taxpayer Relief Act [ATRA; P.L. 112-240 ]), some Senators expressed a desire to have the EITC modification made permanent. ATRA extended these modifications for five years, through the end of 2017. Ultimately, increased marriage penalty relief and the larger credit for families with three or more children were made permanent by the Protecting Americans from Tax Hikes Act (PATH Act; Division Q of P.L. 114-113 ). Additional changes were made to the administration of the EITC with the intention of reducing improper payments of the credit. Improper payments are an annual fiscal year measure of the amount of the credit that is erroneously claimed and not recovered by the IRS. Improper payments can be due to honest mistakes made by taxpayers as well as fraudulent claims of the credit. The Protecting Americans from Tax Hikes Act (PATH Act; Division Q of P.L. 114-113 ) included a variety of provisions intended to reduce improper payments of refundable credits, including improper payments of the EITC. First, the law included a provision that would prevent retroactive claims of the EITC after the issuance of Social Security numbers. As previously discussed, a taxpayer must provide an SSN for themselves, their spouses (if married), and any qualifying children. The law stated that the credit will be denied to a taxpayer if the SSNs of the taxpayer, their spouse (if married), and any qualifying children were issued after the due date of the tax return for a given taxable year. For example, if a family had SSNs issued in June 2017, the family could (if otherwise eligible) claim the EITC on its 2017 income tax return (which is due in April 2018), but could not amend its 2016 income tax return and claim the credit on its 2016 return (which is due in April 2017). In addition, the law also included a provision requiring the IRS to hold income tax refunds until February 15 if the tax return included a claim for the EITC (or the additional child tax credit, known as the ACTC). This provision was coupled with a requirement that employers furnish the IRS with W-2s and information returns on nonemployee compensation (e.g., 1099-MISCs) earlier in the filing season. These legislative changes were made "to help prevent revenue loss due to identity theft and refund fraud related to fabricated wages and withholdings." With more time to cross-check income on information returns with income used to determine the amount of the EITC, it is believed that this will help reduce erroneous payments of the EITC by the IRS. Previous research by the IRS has indicated that the most frequent EITC error was incorrectly reporting income, and the largest error (in dollars) was incorrectly claiming a child for the credit. Appendix A. Current Structure of the EITC There are eight formulas currently in effect to calculate the EITC (four for unmarried individuals and four for married couples, depending on the number of children they have), illustrated in Table A-1 . For any of the eight formulas, the credit has three value ranges similar to those illustrated in Figure A-1 , for an unmarried taxpayer with one child. First, the credit increases to its maximum value from the first dollar of earnings until earnings reach the "earned income amount." Over this "phase-in range" the credit value is equal to the credit rate multiplied by earnings. When earnings are between the "earned income amount" and the "phaseout threshold"--referred to as the "plateau"--the credit amount remains constant at its maximum level. For each dollar over the "phaseout threshold," the credit is reduced by the phaseout rate until the credit equals zero. This final range of income over which the credit falls in value is referred to as the "phaseout range."

The earned income tax credit (EITC), when first enacted on a temporary basis in 1975, was a modest tax credit that provided financial assistance to low-income, working families with children. After various legislative changes over the past 40 years, the credit is now one of the federal government's largest antipoverty programs. Since the EITC's enactment, Congress has shown increasing interest in using refundable tax credits for a variety of purposes, from reducing the tax burdens of families with children (the child tax credit), to helping families afford higher education (the American opportunity tax credit), to subsidizing health insurance premiums (the premium assistance tax credit). The legislative history of the EITC may provide context to current and future debates about these refundable tax credits. The origins of the EITC can be found in the debate in the late 1960s and 1970s over how to reform welfare--known at the time as Aid to Families with Dependent Children (AFDC). During this time, there was increasing concern over growing welfare rolls. Senator Russell Long proposed a "work bonus" plan that would supplement the wages of poor workers. The intent of the plan was to encourage the working poor to enter the labor force and thus reduce the number of families needing AFDC. This "work bonus" plan, renamed the earned income tax credit, was enacted on a temporary basis as part of the Tax Reduction Act of 1975 (P.L. 94-12). As originally enacted, the credit was equal to 10% of the first $4,000 in earnings. Hence, the maximum credit amount was $400. The credit phased out between incomes of $4,000 and $8,000. The credit was also viewed as a means to encourage economic growth in the face of the 1974 recession and rising food and energy prices. Over the subsequent 40 years, numerous legislative changes have been made to this credit. Some changes increased the amount of the credit by changing the credit formula. Major laws that increased the amount of the credit include the following: P.L. 101-508, which adjusted the credit amount for family size and created a credit for workers with no qualifying children; P.L. 103-66, which increased the maximum credit for tax filers with children and created a new credit formula for certain low-income, childless tax filers; P.L. 107-16, which increased the income level at which the credit phased out for married tax filers in comparison to unmarried tax filers (referred to as "marriage penalty relief"); and P.L. 111-5, which increased the credit amount for families with three or more children and expanded the marriage penalty relief enacted as part of P.L. 107-16. Other legislative changes changed the eligibility rules for the credit. Major laws that changed the eligibility rules of the credit include the following: P.L. 103-66, which expanded the definition of an eligible EITC claimant to include certain individuals who had no qualifying children; P.L. 104-193, which required tax filers to provide valid Social Security numbers (SSNs) for work purposes for themselves, spouses if married filing jointly, and any qualifying children, in order to be eligible for the credit; and P.L. 105-34, which introduced additional compliance rules to reduce improper claims of the credit. Together, these changes reflect congressional intent to expand this benefit while also better targeting it to certain recipients.

In cases of significant differences with the President over foreign policy, especially deployments of U.S. military forces abroad, Congress has generally found that use of its Constitutionally-based "power of the purse" to be the most effective way to compel a President to take actions regarding use of U.S. military force overseas that he otherwise might not agree to. Thus, on various occasions since the Vietnam War era, Congress has used funding cutoffs or significant restrictions on the use of funds as a means of ending or circumscribing the use of U.S. military personnel for foreign operations. As the examples set out below indicate, the use of funding cutoffs and restrictions to curtail or terminate the President's use of U.S. military force abroad has proven to be much more efficacious in giving effect to Congress's policy views in this area than has the War Powers Resolution. During the last years of the Vietnam War, there were a number of efforts in Congress to attach amendments to legislation to restrict military actions by the United States in the Indochina region, as part of a larger effort to compel the withdrawal of U.S. military forces from the area. Nearly all of these proposals did not pass more than one House of Congress due to vigorous opposition from the President to them. Those that did succeed in enactment into law are as follows: On December 22, 1970, Congress cleared the Special Foreign Assistance Act of 1971, H.R. 19911, for the President's signature. P.L. 91-652; 84 Stat. 1942 was signed on January 1, 1971. Section 7(a) of this Act prohibited the use of funds authorized or appropriated by it or any other Act "to finance the introduction of United States ground combat troops into Cambodia or to provide U.S. advisors to or for Cambodian military forces in Cambodia." As part of the compromise between Congress and the President that led to the enactment of H.R. 19911, similar curbs that had been placed in other legislation in 1970--specifically H.R. 15628, P.L. 91-672 (the Foreign Military Sales Act), and H.R. 19590, P.L. 91-668 (the Department of Defense Appropriations Act), were deleted. On July 1, 1973, the President signed H.R. 9055 , P.L. 93-50 ; 87 Stat. 99, the second Supplemental Appropriations Act for FY1973. This legislation contained language cutting off funds for combat activities in Indochina after August 15, 1973. Section 307 of P.L. 93-50 specifically states that "None of the funds herein appropriated under this act may be expended to support directly or indirectly combat activities in or over Cambodia, Laos, North Vietnam, and South Vietnam by United States forces, and after August 15, 1973, no other funds heretofore appropriated under any other act may be expended for such purpose." In a related action, the President signed H.J.Res. 636 , P.L. 93-52 , 87 Stat. 130, the Continuing Appropriations Resolution for FY1974 on July 1, 1973. This legislation contained language similar to that in H.R. 9055 ( P.L. 93-50 ). Section 108 of P.L. 93-52 specifically states that "Notwithstanding any other provision of law, on or after August 15, 1973, no funds herein or heretofore appropriated may be obligated or expended to finance directly or indirectly combat activities by United States military forces in or over or from off the shores of North Vietnam, South Vietnam, Laos or Cambodia." On December 30, 1974, S. 3394 , P.L. 93-559 , 88 Stat 1795, the Foreign Assistance Act of 1974 was signed. Section 38(f)(1)set a total U.S. personnel ceiling for (civilians and military) in Vietnam of 4,000 six months after enactment and a total ceiling of 3,000 Americans within one year of enactment. More recent examples of congressional funding limitations aimed at preventing or reducing U.S. military deployments overseas relate to Somalia and to Rwanda. These enacted limitations are as follows. Section 8151 of the Department of Defense Appropriations Act for FY1994, P.L. 103-139 ;107 Stat 1418, signed November 11, 1993, approved the use of U.S. Armed Forces for certain purposes, including combat forces in a security role to protect United Nations units in Somalia, but cut off funding after March 31, 1994, except for a limited number of military personnel to protect American diplomatic personnel and American citizens, unless further authorized by Congress. Additionally, section 8135 of the Department of Defense Appropriations Act for FY1995, P.L. 103-335 ; 108 Stat. 2599, signed September 30, 1994, stated that "None of the funds appropriated by this Act may be used for the continuous presence in Somalia of United States military personnel, except for the protection of United States personnel, after September 30, 1994." Through Title IX of the Department of Defense Appropriations Act for FY1995, P.L. 103-335 108 Stat. 2599, signed September 30, 1994, Congress stipulated that "no funds provided in this Act are available for United States military participation to continue Operation Support Hope in or around Rwanda after October 7, 1994, except for any action that is necessary to protect the lives of United States citizens." Since its enactment in 1973, there is no specific instance when the Congress has successfully utilized the War Powers Resolution to compel the withdrawal of U.S. military forces from foreign deployments against the President's will. Every President from President Nixon forward has taken the position that the War Powers Resolution is an unconstitutional infringement on the authority of the President, as Commander-in-Chief, to utilize the Armed Forces of the United States to defend what he determines are the vital national security interests of the United States. It should be noted, however, that through a compromise with the Congress in September 1983, President Reagan agreed to the Multinational Force in Lebanon Resolution, P.L. 98-119 , that determined that the requirements of section 4(a)(1) of the War Powers Resolution became operative on August 29, 1983, and that Congress authorized the continued participation of the U.S. Marines in the Lebanon Multinational Force for 18 months. President Reagan signed P.L. 98-119 on October 12, 1983. Soon after enactment of P.L. 98-119 , 241 U.S. Marines in Lebanon were killed on October 23, 1983 by a suicide truck bombing. On February 7, 1984, President Reagan announced the Marines would be redeployed and on March 30, 1984, reported to Congress that U.S. participation in the Multinational Force in Lebanon had ended. It is also important to note that beginning in August 1990, following the Iraqi invasion of Kuwait, President Bush over a period of months deployed a substantial number of U.S. military personnel to Saudi Arabia to defend U.S. friends in the region, and, in an effort to induce Iraq to withdraw its military forces from Kuwait. These actions were taken without express authorization by Congress under the War Powers Resolution or any other Act of Congress. Months later in January 1991, Congress passed H.J.Res. 77 , the Authorization for Use of Military Force Against Iraq Resolution, P.L. 102-1 , which President Bush signed on January 14, 1991. In that legislation Congress declared that H.J.Res. 77 constituted specific statutory authorization for the President to use United States Armed Forces to achieve objectives set out in various cited United Nations Resolutions relating to Iraq's aggression against Kuwait, if he made a certification to Congress that such use of force was necessary. Congress also noted in this bill that it constituted the authorization contemplated by section 5(b) of the War Powers Resolution. However, in his signing statement regarding H.J.Res. 77 , President Bush noted the following: "As I made clear to congressional leaders at the outset, my request for congressional support did not, and my signing this resolution does not, constitute any change in the long-standing positions of the executive branch on either the President's constitutional authority to use the Armed Forces to defend vital U.S. interests or the constitutionality of the War Powers Resolution. I am pleased, however, that differences on these issues between the President and many in the Congress have not prevented us from uniting in a common objective." The President, in short, did not characterize a request for "congressional support" for his actions as a request for "congressional authorization" of them. Although, Congress, for its part, characterized its action as a requisite "authorization." More recently, controversy over U.S. military involvement in Kosovo led to an effort to use the War Powers Resolution as a means to address the question of whether the President could order U.S. combat activity abroad in the absence of Congressional authorization to do so. This debate began in earnest when on March 26, 1999, President Clinton notified the Congress "consistent with the War Powers Resolution", that on March 24, 1999, U.S. military forces, at his direction and in coalition with NATO allies, had commenced air strikes against Yugoslavia in response to the Yugoslav government's campaign of violence and repression against the ethnic Albanian population in Kosovo. The President's action, taken in the absence of Congressional authorization, led to efforts to use the War Powers Resolution as a vehicle to either support or overturn the President's actions. Congress also attempted to use denial of funding for the Kosovo operation. On April 28, 1999, the House of Representatives passed H.R. 1569 , by a vote of 249-180. This bill would have prohibited the use of funds appropriated to the Defense Department from being used for the deployment of "ground elements" of the U.S. Armed Forces in the Federal Republic of Yugoslavia unless that deployment was specifically authorized by law. On that same day the House defeated H.Con.Res. 82 , by a vote of 139-290. This resolution would have directed the President, pursuant to section 5(c) of the War Powers Resolution, to remove U.S. Armed Forces from their positions in connection with the present operations against the Federal Republic of Yugoslavia. On April 28, 1999, the House also defeated H.J.Res. 44 , by a vote of 2-427. This joint resolution would have declared a state of war between the United States and the "Government of the Federal Republic of Yugoslavia." The House on that same day also defeated, on a 213-213 tie vote, S.Con.Res. 21 , the Senate resolution passed on March 23, 1999, that supported military air operations and missile strikes against Yugoslavia. On April 30, 1999, Representative Tom Campbell and 17 other members of the House filed suit in Federal District Court for the District of Columbia seeking a ruling requiring the President to obtain authorization from Congress before continuing the air war, or taking other military action against Yugoslavia. The Senate, on May 4, 1999, by a vote of 78-22, tabled S.J.Res. 20 , a joint resolution, sponsored by Senator John McCain, that would authorize the President "to use all necessary force and other means, in concert with United States allies, to accomplish United States and North Atlantic Treaty Organization objectives in the Federal Republic of Yugoslavia (Serbia and Montenegro)." The House, on May 6, 1999, by a vote of 117-301, defeated an amendment by Representative Ernest Istook to H.R. 1664 , the FY1999 defense supplemental appropriations bill, that would have prohibited the expenditure of funds in the bill to implement any plan to use U.S. ground forces to invade Yugoslavia, except in time of war. Congress, meanwhile, on May 20, 1999 cleared for the President's signature, H.R. 1141 , an emergency supplemental appropriations bill for FY1999, that provided billions in funding for the existing U.S. Kosovo operation. On May 25, 1999, the 60 th day had passed since the President notified Congress of his actions regarding U.S. participation in military operations in Kosovo. Representative Tom Campbell, and those who joined his suit, noted to the Federal District Court that this was a clear violation of the language of the War Powers Resolution stipulating a withdrawal of U.S. forces from the area of hostilities occur after 60 days in the absence of congressional authorization to continue, or a presidential request to Congress for an extra 30 day period to safely withdraw. The President did not seek such a 30 day extension, noting instead that the War Powers Resolution is constitutionally defective. On June 8, 1999, Federal District Judge Paul L. Friedman dismissed the suit of Representative Campbell and others that sought to have the court rule that President Clinton was in violation of the War Powers Resolution and the Constitution by conducting military activities in Yugoslavia without having received prior authorization from Congress. The judge ruled that Representative Campbell and others lacked legal standing to bring the suit ( Campbell v. Clinton , 52 F. Supp. 2d 34 (D.D.C. 1999)). Representative Campbell appealed the ruling on June 24, 1999, to the U.S. Court of Appeals for the District of Columbia. The appeals court agreed to hear the case. On February 18, 2000, the appeals court affirmed the opinion of the District Court that Representative Campbell and his co-plaintiffs lacked standing to sue the President. (Campbell v. Clinton, 203 F.3d 19 (D.C. Cir. 2000). On May 18, 2000, Representative Campbell and 30 other Members of Congress appealed this decision to the United States Supreme Court. On October 2, 2000, the United States Supreme Court, without comment, refused to hear the appeal of Representative Campbell thereby letting stand the holding of the U.S. Court of Appeals. (Campbell v. Clinton, cert. denied , 69 U.S.L.W. 3294 (U.S. Oct. 2, 2000)(No. 99-1843). Although not directly analogous to efforts to seek withdrawal of American military forces from abroad by use of funding cutoffs, Congress has used funding restrictions to limit or prevent foreign activities of a military or paramilitary nature. As such, these actions represent alternative methods to affect elements of presidentially sanctioned foreign military operations. Representative examples of these actions are in legislation relating to Angola and Nicaragua, which are summarized below. In 1976, controversy over U.S. covert assistance to paramilitary forces in Angola led to legislative bans on such action. These legislative restrictions are summarized below. The Defense Department Appropriations Act for FY1976, P.L. 94-212 , signed February 9, 1976, provided that none of the funds "appropriated in this Act may be used for any activities involving Angola other than intelligence gathering...." This funding limitation would expire at the end of this fiscal year. Consequently, Congress provided for a ban in permanent law, which embraced both authorization and appropriations acts, in the International Security Assistance and Arms Export Control Act of 1976. Section 404 of the International Security Assistance and Arms Export Control Act of 1976, P.L. 94-329 , signed June 30, 1976, stated that "Notwithstanding any other provision of law, no assistance of any kind may be provided for the purpose, or which would have the effect, of promoting, augmenting, directly or indirectly, the capacity of any nation, group, organization, movement, or individual to conduct military or paramilitary operations in Angola, unless and until Congress expressly authorizes such assistance by law enacted after the date of enactment of this section." This section also permitted the President to provide the prohibited assistance to Angola if he made a detailed, unclassified report to Congress stating the specific amounts and categories of assistance to be provided and the proposed recipients of the aid. He also had to certify that furnishing such aid was "important to the national security interests of the United States." Section 109 of the Foreign Assistance and Related Programs Appropriations Act for FY1976, P.L. 94-330 , signed June 30, 1976, provided that "None of the funds appropriated or made available pursuant to this Act shall be obligated to finance directly or indirectly any type of military assistance to Angola." In 1984, controversy over U.S. assistance to the opponents of the Nicaraguan government (the anti-Sandinista guerrillas known as the "contras") led to a prohibition on such assistance in a continuing appropriations bill. This legislative ban is summarized below. The continuing appropriations resolution for FY1985, P.L. 98-473 , 98 Stat. 1935-1937, signed October 12, 1984, provided that "During fiscal year 1985, no funds available to the Central Intelligence Agency, the Department of Defense, or any other agency or entity of the United States involved in intelligence activities may be obligated or expended for the purpose or which would have the effect of supporting, directly or indirectly, military or paramilitary operations in Nicaragua by any nation, group, organization, movement or individual." This legislation also provided that after February 28, 1985, if the President made a report to Congress specifying certain criteria, including the need to provide further assistance for "military or paramilitary operations" prohibited by this statute, he could expend $14 million in funds if Congress passed a joint resolution approving such action.

This report provides background information on major instances, since 1970, when Congress has utilized funding cutoffs to compel the withdrawal of United States military forces from overseas military deployments. It also highlights key efforts by Congress to utilize the War Powers Resolution to force the withdrawal of U.S. military forces from foreign deployments. It will be updated should developments warrant.

The Library Services and Technology Act (LSTA) was originally adopted as part of the Museum and Library Services Act of 1996, which was enacted on September 30, 1996, as part of P.L. 104-208 , the Omnibus Consolidated Appropriation Act of 1997. The LSTA's authorization expired at the end of FY2002; however, funding was not interrupted. P.L. 108-81 , the Museum and Library Services Act of 2003 (MLSA), reauthorized the LSTA as Title II, Library Services and Technology (LST), of the MLSA. P.L. 108-81 authorized $232 million for Library Services and Technology in FY2004, and such sums as may be necessary for FY2005-FY2009. The bulk of LST funding is distributed to states via formula grants. Funding is also provided for library services for Native Americans, and for national leadership projects. LST grants to the states are allocated to state library administrative agencies (SLAAs), and may be used for the following basic purposes: (a) expanding services for learning and access to information in a variety of formats in all type of libraries, developing and improving electronic or other linkages and networks connecting providers and consumers of library services and resources; and/or (b) targeting library services to under served or disadvantaged populations, such as persons with disabilities, those with limited literacy skills, or children from poor families. Although the bulk of funds appropriated for LST are used for state grants , a percentage of total funds is reserved for national activities, Native Americans , and federal administration . Out of total LST appropriations for a given year, 3.75% must be reserved for national activities . The latter may include competitively awarded grants or contracts for research, demonstrations, preservation, and conversion of materials to digital form, plus education and training for librarians. Congressionally directed grants have also been included in this category, and President Bush's Librarians for the 21 st Century program (described below) is included under this heading. In addition, 1.75% of appropriations is reserved for services to Native Americans (including Indian tribes, Alaskan Natives, and Native Hawaiians), and up to 3.5% of appropriations may be used for federal administration of LST programs. Of the total funding reserved for state grants, each state receives a "flat grant" of $340,000 ($40,000 in the case of outlying areas); remaining funds are allocated on the basis of total population in each state. The federal share of the total costs of assisted activities is 66% in all cases. If there is no year-to-year decline in federal funding for LST, states must maintain levels of spending for library programs, or their LST grants will be reduced in proportion to the reduction in state funding. P.L. 108-81 provides for an increase in minimum state allotments for library services and technology to $680,000, if the amount appropriated for a year, and available for state allotments, exceeds the amount of allotments to all states in FY2003. In addition, minimum state allotments for outlying areas are increased to $60,000, if appropriations in a given year are sufficient to meet the higher state minimums of $680,000. If remaining funds are insufficient to reach $60,000, they are to be distributed equally among outlying areas receiving such funds. However, the level of FY2004 and FY2005 appropriations for the IMLS were not sufficient to trigger the higher state grant amounts authorized by P.L. 108-81 . Participating states are required to develop five-year plans that set goals and priorities consistent with the purposes of LST grants (i.e., to enhance information-sharing networks and target library services to disadvantaged populations). The plans must provide for independent evaluations of federally assisted library services. A wide variety of types of libraries--public, public school, college or university, research (if they provide public access to their collections), and (at state discretion) private libraries--may receive LST aid, not just the public and research libraries eligible for aid under the predecessor legislation, the Library Services and Construction Act (LSCA). No more than 4% of each state's grant may be used for administration; however, there is no limit on the share of funds that can be used at the state level to provide services, as opposed to being allocated to local libraries. Library Services and Technology grants are intended to provide states with considerable latitude in the use of funds. LST funds are allocated within states on a competitive basis by the SLAA. LST is administered by the Institute of Museum and Library Services (IMLS). The IMLS was created through expansion of the previous Institute of Museum Services (IMS). The IMLS contains an Office of Museum Services (OMS) and an Office of Library Services (OLS). The IMLS is under the general aegis of the National Foundation on the Arts and the Humanities, which also includes the National Endowment for the Arts (NEA) and the National Endowment for the Humanities (NEH). Nevertheless, the Institute acts as an independent agency. The IMLS directorship alternates between persons with "special competence" in library and information services or in museum services. The current IMLS director is Robert Martin, who includes in his past professional experience service as a Director and Librarian of the Texas Library and Archives Commission. At all times, an Office of Library Services within the IMLS is directed by a Deputy Director with a graduate degree in library science, and expertise in library and information services. Table 1 below, shows the FY1997-FY2007 appropriations for Library Services and Technology (LST). For FY2006, LST was funded at $210.597 million. The Administration has requested increasing that funding to $220.855 million in FY2007. The House Committee on Appropriations has recommended $220.855 million in funding for FY2007; the Senate Committee on Appropriations has recommended funding of $213.337 million. The FY2006 budget includes $23.8 million for an initiative first funded in FY2003 to train and recruit librarians, provide scholarships, support distance learning in under served rural areas, and enhance the diversity of librarians to better serve communities. Beginning in FY2003, the OMS and the OLS were combined in one appropriation account within the Labor, Health and Human Services, and Education (L-HHS-ED) Appropriations bill. In the past there had been two funding streams, one account for OMS within the Department of the Interior Appropriations and one for OLS within the L-HHS-ED Appropriations. The federal government has provided direct aid for public libraries since initial adoption of the Library Services and Construction Act (LSCA) in 1956. The 104 th Congress considered legislation to extend and amend LSCA programs, as well as to consolidate these programs with separate authorizations of federal aid to elementary and secondary school and college libraries. The Library Services and Technology Act consolidated and replaced a number of programs under Title VII, Subtitle B of the L-HHS-ED Appropriations Act of 1997 within P.L. 104-208 . These programs included the LSCA, plus library assistance programs authorized by Title II of the Higher Education Act (HEA), and Title III, Part F, of the Elementary and Secondary Education Act (ESEA). P.L. 108-81 , the Museum and Library Services Act of 2003 (MLSA), reauthorized the LSTA as Title II, Library Services and Technology (LST), of the MLSA. While states have had a large degree of discretion in selecting grantees and deciding how funds are to be used under both the former LSCA and the current LST, overall state discretion would appear to be increased under the current program. At the same time, some funds--particularly aid for construction under the former LSCA Title II--were intended for specific purposes that are not authorized for LST grants. In fact, P.L. 108-81 includes a provision explicitly prohibiting the use of funds for construction. The library services and technology provisions of P.L. 108-81 also focus more thoroughly on relatively new forms of information sharing and networking, such as the Internet, than the LSCA. Issues that were discussed during the reauthorization of the LSTA included the adequacy of minimum state grants and overall authorization levels; the need for additional funding to provide for evaluations of the LSTA; and new provisions disallowing grants for projects deemed obscene. On September 25, 2003, the Museum and Library Services Act of 2003 was signed into law ( P.L. 108-81 ). The LSTA was reauthorized as Title II, Library Services and Technology of the MLSA. The major changes regarding Library Services adopted in the reauthorized Museum and Library Services Act of 2003 include the following: prohibiting the funding of projects deemed obscene; defining "obscene" and the term "determined to be obscene"; requiring the Director of the IMLS to establish procedural standards for reviewing and evaluating grants; increasing minimum state allotments for library services to $680,000 if the amount appropriated for a year, and available for state allotments, exceeds the amount of allotments to all states in FY2003 (the level of FY2004 appropriations for the IMLS is not sufficient to trigger the higher state grant amounts authorized by P.L. 108-81 ); increasing minimum state allotments for outlying areas to $60,000, if appropriations in a given year are sufficient to meet the higher state minimums of $680,000. If remaining funds are insufficient to reach $60,000, they are to be distributed equally among outlying areas receiving such funds; authorizing $232 million for Library Services and $38.6 million for Museum Services for FY2004, and such sums as may be necessary for FY2005-FY2009; locating advisory functions (which for libraries were previously delegated to the National Commission on Libraries and Information Sciences) within a new National Museum and Library Services Board (previously solely a Museum Services Board) in the IMLS; making the Chairman of the National Commission on Library and Information Science a member (nonvoting) of the national Museum and Library Services Board; requiring the Director to carry out and publish analyses of the impact of museum and library services, and increasing from 3% to 3.5% the amount available for federal administrative costs, to provide funding for this new function; prohibiting the use of IMLS funds for construction; and permitting the Director of the IMLS to make national awards for library service, in addition to the already authorized national awards for museum service. H.R. 13 (Hoekstra), a bill to reauthorize Library Services and Technology within the Museum and Library Services Act of 2003, was introduced on January 7, 2003, and was reported favorably by the House Committee on Education and the Workforce on February 13, 2003. H.R. 13 was passed by the full House on March 6, 2003. H.R. 13 , as passed by the House, would have changed the authorization for Library Services and Museum Services to $210 million and $35 million, respectively, for FY2004 and such sums as may be necessary for 2005 through 2009. H.R. 13 contained new provisions that would have required the IMLS Director to establish procedural standards for reviewing and evaluating grants, including a provision prohibiting the funding of projects determined to be obscene. New provisions in H.R. 13 also provided a definition of "obscene" and of the term "determined to be obscene." It would have required the Director to carry out and publish analyses of the impact of museum and library Services, and would have increased from 3% to 3.5% the amount available for federal administrative costs, to provide funding for this new function. H.R. 13 would have located advisory functions (which for libraries were previously delegated to the National Commission on Libraries and Information Sciences) within a new National Museum and Library Services Board (previously solely a Museum Services Board) in the IMLS. It would have permitted the Director of the IMLS to make national awards for library service, in addition to the already authorized national awards for museum service. It would have increased minimum state allotments for Library Services to $680,000, if the amount appropriated for a year, and available for state allotments, exceeded the amount of allotments to all states in FY2003. Finally, the bill would have increased minimum state allotments for outlying areas to $60,000 if appropriations in a given year were sufficient to meet the higher state minimums of $680,000. S. 888 (Gregg), was introduced on April 11, 2003, and reported favorably by the Senate Committee on Health, Education, Labor, and Pensions on May 14, 2003. On August 1, 2003, the Senate incorporated S. 888 into H.R. 13 and passed H.R. 13 in lieu of S. 888 with an amendment by unanimous consent. Authorization levels for FY2004 contained in the Senate passed bill were reduced from the authorization levels contained in S. 888 as reported by the Senate Committee on Health, Education, Labor, and Pensions (from $250 million to $232 million for Library Services and Technology; and from $41.5 to $38.6 million for Museum Services). The Senate-passed bill included the following provisions that were contained in S. 888 as reported by the Senate Committee on Health, Education, Labor, and Pensions, but were not contained in H.R. 13 as passed by the House: provisions that would have made the Chairman of the National Commission on Library and Information Science a member (nonvoting) of the National Museum and Library Services Board; a prohibition against using IMLS funds for construction; and provisions that would have raised liability amounts in the Arts and Artifacts Indemnity Act. S. 238 (Reed) was introduced on January 29, 2003, and was referred to the Senate Committee on Health, Education, Labor and Pensions. The Library Services and Technology provisions of this bill were essentially the same as those in S. 2611 (Reed), introduced in the 107 th Congress. Authorization levels in S. 238 were $350 million for Library Services and Technology and $65 million for Museum Services. S. 238 , however, unlike S. 2611 , also included amendments raising liability amounts in the Arts and Artifacts Indemnity Act.

Legislation reauthorizing the Library Services and Technology Act (LSTA) as Title II--Library Services and Technology, of the Museum and Library Services Act of 2003 (MLSA), was signed into law ( P.L. 108-81 ) on September 25, 2003. The LSTA's authorization had expired at the end of FY2002; however, funding was not interrupted. Library Services and Technology (LST) is administered by the Institute of Museum and Library Services (IMLS). The IMLS contains an Office of Museum Services (OMS) and an Office of Library Services (OLS). Beginning in FY2003, the OMS and the OLS were combined in one appropriation account within the Labor, Health and Human Services, and Education (L-HHS-ED) Appropriations bill. In the past there had been two funding streams, one account for OMS within the Department of the Interior Appropriations, and one for OLS within the L-HHS-ED Appropriations. P.L. 108-81 authorized $232 million for LST in FY2004, and such sums as may be necessary for FY2005-FY2009. The bulk of LST funding is distributed to states via formula grants. Funding is also provided for library services for Native Americans, and for national activities. Participating states are required to develop five-year plans that set goals and priorities consistent with LST purposes (i.e., to enhance information-sharing networks and target library services to disadvantaged populations). The plans must provide for independent evaluations of federally assisted library services. A wide variety of types of libraries--public, public school, college or university, research (if they provide public access to their collections), and (at state discretion) private libraries--may receive LST aid. P.L. 108-81 provides for an increase in minimum state allotments for library services to $680,000, if the amount appropriated for a year, and available for state allotments, exceeds the amount of allotments to all states in FY2003. In addition, minimum state allotments for outlying areas are increased to $60,000, if appropriations in a given year are sufficient to meet the higher state minimums of $680,000. Library Services received funding of $210.597 million in FY2006; the Administration has requested increasing that funding to $220.855 million for FY2007. The House Committee on Appropriations has recommended $220.855 million in funding for FY2007; the Senate Committee on Appropriations has recommended funding of $213.337 million. This report will be updated in response to legislative developments.

Almost all commercial service airports in the United States are owned by local and state governments, or by public entities such as airport authorities or multipurpose port authorities. In 1996, Congress established the Airport Privatization Pilot Program (APPP) to explore the prospect of privatizing publicly owned airports and using private capital to improve and develop them. In addition to reducing demand for government funds, privatization has been promoted as a way to make airports more efficient and financially viable. Participation in the APPP has been very limited. Only two airports have completed the privatization process, and one of them later reverted to public ownership. Owners of other airports considered privatization, but eventually chose not to proceed. The lack of interest in privatization among U.S. airports could be the result of (1) readily available financing sources for publicly owned airports; (2) barriers or lack of incentives to privatize; (3) the potential implications for major stakeholders; and (4) satisfaction with the status quo. Privatization refers to the shifting of governmental functions, responsibilities, and sometimes ownership, in whole or in part, to the private sector. With respect to airports, "privatization" can take many forms up to and including the transfer of an entire airport to private operation and/or ownership. In the United States, most cases of airport privatization fall into the category of "partial privatization"; full privatization, either under or outside the APPP, has been very rare. Figure 1 illustrates four generic airport privatization models, from the least privatized, the award of service contracts to private firms, to the long-term transfer of an airport out of the public sector. Service Contracts. Many U.S. airports outsource some non-core operations to private firms that specialize in those functions. Examples of operations that are frequently outsourced are cleaning and janitorial services, airport landscaping, shuttle bus operations, and concessions in airport terminals. This is probably the most common type of privatization among U.S. airports. Management Contracts. Some airports engage the management expertise of the private sector by contracting out specific facilities or responsibilities, such as parking, terminal concessions, terminal operations, airfield signage, fuel farms, and aircraft refueling. In a few cases, a private management company has been awarded a contract to manage an entire airport for a specified term. This is a form of partial privatization. For example, Virginia-based AvPorts, a specialized aviation facilities company, has management services contracts with a number of airports, including Albany International Airport, NY (ALB) and Westchester County Airport, NY (HPN). Developer Financing/Operation. A wide range of contracts has been used to involve the private sector in providing financing, development, operation, and maintenance services. This is also known as the Design-Build-Finance-Operate-Maintain (DBFOM) model. Airport DBFOM examples include passenger terminals (notably Terminal 5 at Chicago O'Hare International Airport and Terminal 4 at New York John F. Kennedy International Airport), parking garages, and rental car facilities. Long-T erm Lease or Sale. Full privatization involves the sale or long-term lease of an airport to a private owner or operator. Under a long-term lease or concession agreement, the airport owner grants full management and development control to the private operator in exchange for capital improvements and other obligations such as an upfront payment and/or profit-sharing arrangements. Only two airports have successfully entered into long-term leases. Under a full sale, ownership and full responsibility for operation, capital improvements, and maintenance would be transferred to a private buyer. Several airports in Europe have been privatized in this way, but there have been no sales of commercial service airports in the United States. Airport privatization, especially in the case of long-term lease or sale, involves four major stakeholders: airport owners, which in the United States are mostly local or regional governments or public entities; air carriers; private investors; and the federal government. These stakeholders ultimately decide whether a privatization deal goes forward and they tend to have different objectives and, in many cases, divergent interests. Airline passengers may experience the effect of privatization via, for example, airport concession offerings, operational efficiency, and changes in prices and fees, but passenger interests are usually not represented formally in discussions of privatization. Airport owners, who are usually local governments , might opt for privatization if they could extract money for general use. However, federal regulations generally require that lease or sale revenue from airport privatization be used only for airport purposes (unless the majority of airlines agree otherwise, under the APPP). On the other hand, privatization involves surrendering control of an economically important facility. By reducing or eliminating responsibilities of the public agency or authority that owns the airport, it may lead to the loss of public-sector jobs. Hence, a public-sector owner may see few benefits from selling or leasing an airport to a private operator unless the facility is losing money--and in that case, private investors might not find the airport an attractive investment. The federal Airport Privatization Pilot Program, discussed below, is meant to encourage privatization by granting certain exemptions to public-sector owners with regard to revenue diversion and other obligations. Air carriers , including both scheduled passenger airlines and cargo airlines, would like to keep their costs low. They also want to have some control over how airport revenues are used, especially to ensure that the fees paid by themselves and their customers are used for airport-related purposes. Their interest in low landing fees and low rents for ticket counters and other facilities may be contrary to the interest of potential private operators in increasing revenue. At the same time, however, air carriers have an interest in ensuring that the airports they use are well maintained and carefully managed. They might have reason to support a proposed privatization if they thought it would result in lower charges, better airport services, or increased efforts to promote the airport. Private investors and operators expect a financial return on their investments. They will be looking above all at growth potential, such as opportunities to bring additional flights to the airport, to earn additional lease revenue by improving amenity offerings such as shopping and dining for passengers, or to draw more freight traffic by offering lower fees or improved facilities. If they attempt to increase profitability by raising landing fees or rents, that may bring them into conflict with air carriers using the airport. The federal government , represented by the Department of Transportation (DOT) and DOT's Federal Aviation Administration (FAA), has been directed by Congress to engage private capital in aviation infrastructure development and reduce reliance on federal grants and subsidies. However, FAA also has statutory mandates to maintain the safety and integrity of the national air transportation system and to enforce compliance with commitments, known as "grant assurances," that airports have made to obtain grants under the federal Airport Improvement Program (AIP). Thus, while FAA administers the APPP, it is likely to carefully examine privatization proposals that might risk closures of runways or airports or otherwise reduce aviation system capacity or that appear to favor certain airport users over others. The divergent interests of stakeholders are a significant issue in privatization. Striking a balance among these interests while facilitating privatization is one of the purposes of the Airport Privatization Program. The Federal Aviation Reauthorization Act of 1996 (49 U.S.C. SS47134; Section 149 of the Federal Aviation Reauthorization Act of 1996, P.L. 104-264 ) established the APPP. The program was created to test a new concept for increasing private participation, especially private capital investment, in airport operations and development. The law authorizes the Secretary of the U.S. Department of Transportation and, through delegation, the FAA Administrator, to exempt participating airports from certain federal requirements. Specifically, the Administrator may exempt the airports from all or part of the requirements to use airport revenue for airport-related purposes, to repay federal grants, or to return airport property acquired with federal assistance upon the lease or sale of the airport deeded by the federal government. The law originally limited participation in the APPP to no more than five airports. The FAA Modernization and Reform Act of 2012 ( P.L. 112-95 ) increased the number of airports that may participate from 5 to 10. Only one large hub commercial airport may participate in the program and that airport may only be leased, not sold. Only general aviation airports can be sold under the APPP. (See the Appendix for definitions of airport types.) Table 1 provides a comparison of the requirements and regulations governing airport privatization under and outside the APPP. The APPP has had very limited success in increasing the number of privately run airports. Since its inception, 12 airports have applied to enter the APPP, but only 2 have completed the entire privatization process. One of these later reverted to public ownership. Table 2 lists the APPP applicants and their status. In 2000, Stewart International Airport in Newburgh, NY, became the first commercial service airport privatized under the APPP. National Express Group PLC, a U.K.-based transportation company, made an initial $35 million up-front payment to the owner, the state of New York, for a 99-year lease, and agreed to pay the state 5% of the airport's gross income on the lease's 10 th anniversary or after 1.38 million passengers used the airport, whichever occurred first. National Express Group also made $10 million in capital contribution during its operation of the airport. Unable to obtain airline approvals to use airport revenue for general purposes, the airport owner, the state of New York, agreed to use the lease payments for airport purposes and to recoup past subsidies for Stewart Airport and other state-owned airports in accordance with FAA's revenue use policy. National Express apparently was unsuccessful in increasing passenger traffic at Stewart; according to FAA data, the airport registered 274,126 enplanements in 2000, the year National Express assumed management, but only 156,638 six years later. The company's attempt to make the airport more attractive to passengers going to and from New York City by renaming it "New York-Hudson Valley International Airport" was abandoned amid local opposition. In 2006, National Express decided to focus its U.S. efforts on school bus operations, and moved to dispose of its lease on Stewart. The following year, the Port Authority of New York and New Jersey purchased the remaining term of the lease for $78.5 million. Although National Express never disclosed the profitability of its operation at Stewart, the Port Authority reported a $0.8 million loss in 2007, when it ran the airport for part of the year, and a $5.5 million loss in 2008, its first full year of operation. This suggests that the operation may not have been profitable for the private owner. However, National Express booked a profit of PS16.2 million (approximately $33 million at the time) on the sale to the Port Authority, suggesting that it earned a significant return on its investment. The APPP slot reserved for a large hub commercial airport was once taken by Chicago Midway International Airport but its privatization efforts never materialized. The City of Chicago received airline approval to lease the city-owned airport to private investors. On October 3, 2006, FAA authorized the city to select a private operator, negotiate an agreement, and submit a final application under the pilot program. On October 8, 2008, the Chicago City Council agreed to a $2.52 billion, 99-year lease with Midway Investment and Development Corporation (MIDCo), a consortium led by Citigroup, Inc., John Hancock Life Insurance Co., and a unit of Vancouver (British Columbia) International Airport. The deal was delayed due to the inability of the selected consortium to secure financing in the credit market during the global economic crisis. The lease agreement was terminated when the group missed the April 6, 2009, payment deadline. MIDCo had to pay a $126 million penalty to the city. A renewed effort to lease Midway was abandoned in 2013 after one of the two bidding groups dropped out. The city then announced that it would suspend plans to lease the airport. On September 9, 2013, the City of Chicago withdrew its preliminary privatization application. This opened up the APPP slot reserved for a large hub airport. Luis Munoz Marin International Airport, a medium hub airport in San Juan, Puerto Rico, is the only commercial service airport operating under private management after privatization under the APPP. FAA approved the final privatization contract in February 2013, and the airport was transferred to a private operator, Aerostar Airport Holdings (Aerostar), on February 25, 2013. Aerostar Airport Holdings paid $615 million in upfront proceeds to the Puerto Rico Ports Authority, and will pay a further estimated $550 million over the 40-year lease that includes an annual lease payment of $2.5 million for the first five years of the contract, 5% of gross airport revenues during the following 25 years, and 10% of gross airport revenues during the final 10 years of the lease. Aerostar also agreed to a $1.2 billion capital plan, including the remodeling and renovation of the terminal buildings. Aerostar reported that by the end of 2016 it had invested over $176 million in remodeling and renovations, as well as other improvements. Hendry County Airglades Airport in Clewiston, FL, a general aviation airport, received preliminary approval from FAA for privatization under the APPP in October 2010. In August 2014, FAA approved a management contract between the county and a private operator. As of August 2017, the airport is working with the proposed private operator to finalize its application. In December 2016, FAA accepted a preliminary application from Westchester County Airport. The airport is owned and operated by the County of Westchester and is in White Plains, NY, about 40 miles north of New York City. It serves an average of 1.75 million passengers a year. The preliminary application from St. Louis Lambert International Airport was accepted by FAA in April 2017. This medium-hub airport, once known as Lambert Field, is owned and operated by the City of St. Louis. The airport is located about 10 miles northwest of St. Louis and is the largest airport in the State of Missouri. Over its 20-year history, the APPP has not been successful in stimulating wide interest in airport privatization. The program's modest results appear to have several causes. Applying to privatize an airport under the APPP, as reported by FAA, makes the transfer from public to private ownership too "time consuming" and presents risks that could cause a potential deal to fail. The process may take years to complete. In the cases of Luis Munoz Marin International Airport, more than three years elapsed from preliminary application to final FAA approval, and informal discussions with FAA may have consumed additional time prior to the filing of the preliminary applications. In the case of Hendry County Airglades Airport, more than six years have elapsed since the application was submitted to FAA. The application process begins with an airport filing a preliminary application for FAA approval, upon which one of the ten slots available under the APPP is reserved for that airport. The preliminary application must include a summary of privatization objectives; a description of the process and a timetable; current airport financial statements; and a copy of the airport owner's request for potential private operators to submit proposals. FAA has 30 days to review the preliminary application. Once an airport receives preliminary approval, it then may select a private operator from among those offering proposals, negotiate an agreement, and submit a final application to FAA. There is no timeline as to how quickly FAA must complete its review of the final application. After FAA gives notice of its proposed approval of the final application and lease agreement in the Federal Register , there is a 60-day public review and comment period. After that, FAA completes its review and prepares its Findings and Record of Decision (ROD), in which it addresses the public comments and publishes the details of its decision. Airport privatization under the APP has a number of regulatory requirements, some of which have been criticized as overly restrictive or vague. These requirements may have lessened airport owners' and/or investors' interest in privatization. They include the need for 65% of air carriers serving the airport to approve a lease or sale of the airport; restrictions on increases in airport rates and charges that exceed the rate of increase of the Consumer Price Index (CPI), and a requirement that a private operator comply with grant assurances made by the previous public-sector operator to obtain AIP grants. In addition, after privatization the airport will be eligible for AIP formula grants to cover only 70% of the cost of improvements, versus the normal 75%-90% federal share for AIP projects at publicly owned airports. This serves as a disincentive to privatize an airport, because it will receive less federal money after privatization. In surface transportation, a key purpose of privatization is to attract private capital to supplement public spending that is insufficient to provide the desired level of construction and maintenance. In general, lack of resources has been a far less important issue for airport operators than for highway and public transportation agencies. Publicly owned airports have access to five major sources of funding. The Airport Improvement Program (AIP) provides federal grants to airports for planning and development, mainly of capital projects related to aircraft operations, such as runways and taxiways. Local passenger facility charges of up to $4.50 per boarding passenger, imposed pursuant to federal law, can generate revenue for a broad range of projects, including "landside" projects on airport property such as passenger terminals and ground access improvements, and for interest payments. Tax-exempt bonds, often secured by airport revenue, offer less costly financing than is generally available to private entities. Tenant leases, landing fees, and other charges are important revenue sources at some airports. Many airports, especially smaller ones, also benefit from state and local grants. These financing arrangements have important implications for airport privatization. If a publicly owned airport were to be privatized outside the APPP, its private operator may not be eligible to receive AIP formula funds and may have to draw on its own resources to improve runways and taxiways. The operator would not be entitled to issue bonds with federal tax-exempt status, and would therefore have to pay higher interest rates on its bonds than a public-sector operator. On the other hand, the private operator would have relative freedom to impose passenger usage fees and to increase landing fees, rents, and other charges, so long as this was not done in a discriminatory fashion. An airport privatized under APPP would continue to have access to federal AIP grants, although the private operator would have to provide a 30% match, considerably more than the 10%-25% matches required of publicly owned airports. The operator would not be entitled to issue bonds with federal tax-exempt status, and would therefore have to pay higher interest rates on its bonds than a public-sector operator. It could continue to collect passenger facility charges, but could not impose charges higher than those authorized by federal law. Its ability to raise fees paid by air carriers would be constrained. These limitations are largely the consequence of federal laws. They may explain why airport privatization has been less attractive in the United States than in Europe and Canada. Several European countries and Canada have undertaken notable steps in airport privatization. Two factors that have facilitated privatization in other countries do not exist in the United States. First, many of the major airports that have been privatized in Europe and Canada were previously owned by national governments, not by local or provincial governments, so the decision to privatize did not need to be taken at multiple levels of government. Second, the tax-favored status of debt issued by state and local governments in the United States has no analogue in most other countries, so the shift from public to private ownership did not necessarily entail higher borrowing costs. Airport privatization started to build momentum when British Prime Minister Margaret Thatcher's administration privatized the former British Airport Authority (BAA). BAA had been part of the British Aviation Ministry from 1946 to 1966, and then became an independent government agency. The transfer of BAA to the private sector in 1987 transformed the airport sector in the United Kingdom and, eventually, around the world. By listing the shares of BAA plc on the London stock exchange, the government privatized the seven BAA airports, including London Heathrow, London Gatwick, and London Stansted. The British government initially owned a stake in BAA plc, but sold all its shares by 1996. It retained a "golden share," which entitled it to block a takeover by foreign investors, until 2003. Under the British approach to privatization, airports' charges were subject to economic regulation by the Civil Aviation Authority, a government agency, which had additional authority over the largest airports. Due to statutory changes enacted in 2012, only airports with more than 5 million annual passengers are now subject to government regulation of their charges. Heathrow, Gatwick, and Stansted have been deemed "designated" airports subject to closer regulatory supervision. The privatization of BAA has not been without its critics. Some economists argued that by selling BAA's seven airports all together, the U.K. government had, in effect, converted public assets into a regulated private monopoly. In 2009, the U.K. Competition Commission required BAA plc to divest Gatwick, Stansted, and either Edinburgh or Glasgow airports in order to maintain competition. In 2006, BAA plc was acquired for PS10.1 billion by Airport Development & Investment Ltd (ADI), a consortium led by Ferrovial Aeropuertos S.A. of Spain. Ferrovial then sold BAA's non-U.K. airport stakes such as Budapest and a number of Australian airports. The name BAA was officially dropped on November 12, 2012, and the company was rebranded as Heathrow Airport Holdings Ltd (HAH). Following the transactions, Ferrovial remains the largest shareholder in HAH with a 25% stake. Not all airport privatizations in the United Kingdom have been successful. Cardiff Airport in Wales, formerly operated by a consortium of the Spanish companies Albertis and AENA, was purchased by the Welsh government for PS52 million in March 2013. The private owners were interested in selling after annual passenger numbers fell from 2.1 million in 2007 to barely 1 million in 2012 and the airport became unprofitable. Prestwick Airport in Scotland, which BAA plc had sold to another private operator in 1992 and was most recently owned by the New Zealand company Infratil, was purchased by the Scottish government in November 2013 for the nominal amount of PS1. As with Cardiff, several carriers had ceased service at Prestwick and passenger numbers had fallen sharply. Subsequent to the British privatization action of 1987, a number of governments in Europe privatized major airports, either fully or partially. Some of these private owners or operators then acquired full or partial ownership interests in other airports. At the same time, some public-sector airport operators expanded by providing management services at other airports. Entities such as AENA and Schiphol Group of the Netherlands are active internationally. Schipohl Group, of which the Dutch government is the majority owner, rebuilt and now operates Terminal 4 at Kennedy International Airport in New York. According to a 2016 study by Airports Council International--Europe, approximately 14% of European airports are owned by mixed public-private shareholders and 9% are fully privatized. The Canadian Air Transportation Administration (CATA) of the Department of Transport (later renamed Transport Canada) owned and managed most airports and air navigation facilities in Canada until the early 1990s. In 1992 the Canadian government started to devolve the operation, management, and development of airports in Canada from Transport Canada to local airport authorities (LAAs) that were set up as not-for-profit corporations. These airport authorities are fully responsible for funding all operating and infrastructure costs and must invest all profits back into the airports. As a first round of airport transfer, the federal government leased out four major airports in the summer of 1992--Calgary, Vancouver, Edmonton, and Montreal. In July 1994, Transport Canada announced a National Airports Policy (NAP) that grouped airports into 5 categories: 26 National Airports System (NAS) airports, 71 regional and local airports, 31 small airports, 13 remote airports, and 11 Arctic airports. The NAP required that ownership of regional and local airports be transferred from the federal government to regional or local interests such as provincial and local governments, airport commissions, and private businesses. The NAS airports--the 26 airports that handled more than 200,000 passengers per year or served provincial or territorial capitals--were leased to Canadian Airport Authorities (CAAs), not-for-profit and non-share corporations similar to LAAs, which are responsible for operations, management, and capital expenditures. The government retains ownership of the airports and receives rent payments from the CAAs and LAAs. The government removed operating subsidies from regional or local airports over a five-year period. In its place, an Airport Capital Assistance Program (ACAP) was established to provide federal funding for safety-related airside capital projects at these airports. Thirty of the 31 small airports have been transferred to local interests, per an NAP requirement that all small airports be transferred to local interests or closed. The government continues to support remote and Arctic airports that service isolated communities. Except for the airports operated by or on behalf of Transport Canada, the federal government does not regulate airport charges at airports already transferred to CAAs, LAAs, or local interests. The government permits airport authorities to determine airport charges as long as they are non-discriminatory and competitive. Airports are also free to impose local passenger fees as a way to generate revenues for capital improvements or infrastructure expansions. The airports pay hundreds of millions of dollars a year in rent to the federal government and hundreds of millions in "payments in lieu of tax" to municipal governments across Canada. For the 2014-2015 fiscal year, Transport Canada reportedly collected C$313 from NAS airports. Critics of Canada's "users pay" system question whether it has benefited aviation consumers. Some contend that these "quasi-independent" authorities, whose board members are often nominated by municipalities, often represent the interest of local stakeholders. A 2012 report prepared for the Standing Senate Committee on Transport and Communications indicated that passengers departing Canadian airports often pay 60% and 75% above the base airfare to cover taxes and charges, compared to between 10% and 18% in the United States. The Canadian Airports Council estimated that in 2011, 4.8 million Canadians chose to cross the U.S. border and fly from U.S. airports. For example, about 85% of the annual passengers at Plattsburgh International Airport in upstate New York, near the Canadian border, are Canadian residents. The report concluded that the burden of Canada's airport rents, fees, and other service charges was undermining the competitiveness of Canadian airports located near the U.S. border. Congress has been interested in airport privatization as a way to save money by making airports less dependent on federal assistance while also, in the long run, increasing the nation's aviation capacity to meet growing demand for air travel. However, under current federal law, privatization has struggled to achieve these goals. Federal AIP spending is ultimately determined via the budget process and therefore budget savings may or may not result from airport privatization. Privatization outside the framework of the APPP is generally unattractive to both airport owners and potential investors, as it is likely to result in higher financing costs and loss of federal AIP grants and will not provide the public-sector owner with revenues that can be used for other purposes. Privatization within the framework of the APPP may generate minor reductions in federal outlays due to the requirement for a privately run airport to match a larger share of federal AIP grants, but it is not clear that privatization serves the interests of public-sector owners or air carriers, except in cases where the airport is losing money or the owner can channel the proceeds of privatization into capital projects at other airports. Private investors' ability to earn money from an airport privatized under the APPP is limited by restrictions on passenger facility charges and limitations on increases in other airport fees. Air carriers, in most cases, will see advantages from privatization only if they can negotiate lower rents and landing fees in return for agreeing to it, but this would diminish the potential financial return to investors. Streamlining the APPP application and review process might make privatization somewhat more attractive by reducing the risks arising from a long application period, such as changes in economic and capital market conditions. However, significantly increasing interest in airport privatization is likely to require structural change to the existing airport financing system. Options might include the following: Offering the same tax treatment to private and public airport infrastructure bonds. This could be done by eliminating the current federal income tax exemption of interest on bonds issued by public-sector airport owners or by extending tax-exempt or tax-preferential treatment to airport infrastructure bonds issued by private investors. Either change would eliminate a major disincentive to shift airports from public to private ownership. On the other hand, removing the tax exemption on public-sector airport bonds would raise airports' financing costs, while extending it to private-sector bonds could have consequences for federal revenues. Changing AIP requirements. Reducing the percentage match private operators must provide to obtain AIP grants to the level of comparable public operators would make privatization more attractive to private investors, but would increase the share of federal funding. Relaxing AIP grant assurances. If private investors were freed from some of the requirements agreed to by the public owner in order to obtain AIP funds, privatization might become more attractive to investors. However, some of the changes that might be most attractive to investors, such as allowing the sale of airport property, might interfere with the federal interest in maintaining aviation system capacity and safety. Liberalizing rules governing fees. Allowing privatized airports more flexibility to impose passenger facility charges and to raise rents and landing fees would make privatization more attractive to investors. However, this might increase airline opposition to privatization and could lead to higher costs for passengers and air cargo shippers. Easing limits on use of privatization revenue. Reducing the obstacles for public-sector owners to use privatization revenue for non-airport purposes would stimulate local and state government interest in privatization. On the other hand, it could potentially lead to a lower level of investment in aviation infrastructure. The following types of airports are discussed in this report: Commercial Service Airports Publicly owned airports that receive scheduled passenger service and board at least 2,500 passengers each year. There are 509 commercial service airports. Primary Airports Commercial service airports that board more than 10,000 passengers each year. Large Hub Airports board 1% or more of system-wide passengers (30 airports, 72% of all enplanements). Medium Hub Airports board 0.25% but less than 1% of system-wide passengers (31 airports, 15% of all enplanements). Small Hub Airports board 0.05% but less than 0.25% of system-wide passengers (72 airports, 8% of all enplanements). Non-Hub Airports board more than 10,000 but less than 0.05% of system-wide passengers (249 airports, 4% of all enplanements). Non-primary Commercial Service Airports Board at least 2,500 but no more than 10,000 passengers each year (127 airports, 0.1% of all enplanements). General Aviation Airports General aviation airports do not receive scheduled commercial or military service but typically support business, personal, and instructional flying; agricultural spraying; air ambulances; on-demand air-taxies; and/or charter aircraft service (2,564 airports). Reliever Airports Airports designated by FAA to relieve congestion at commercial airports and provide improved general aviation access (259 airports).

In 1996, Congress established the Airport Privatization Pilot Program (APPP; 49 U.S.C. SS47134; Section 149 of the Federal Aviation Reauthorization Act of 1996, P.L. 104-264) to increase access to sources of private capital for airport development and to make airports more efficient, competitive, and financially viable. Participation in the program has been very limited, in good part because major stakeholders have different, if not contradictory, objectives and interests. Only two U.S. commercial service airports have completed the privatization process established under the APPP. One of those, Stewart International Airport in New York State, subsequently reverted to public ownership. Luis Munoz Marin International Airport in San Juan, Puerto Rico, is now the only airport with a private operator under the provisions of the APPP. As of August 2017, there are three active applicants in the APPP: Hendry County Airglades Airport in Clewiston, FL; Westchester County Airport in White Plains, NY; and St. Louis Lambert International Airport in St. Louis, MO. Increasing interest in airport privatization is likely to require a number of significant policy changes, including the following: Making privatization more attractive to public-sector owners by facilitating the use of privatization revenue for non-airport purposes. Providing similar tax treatment to bonds issued by public-sector and private-sector airport operators, as public-sector operators now have access to less costly long-term finance than private operators. Easing requirements for private owners to comply with assurances previously made by public-sector owners to obtain federal Airport Improvement Program (AIP) grants. Accelerating the application and approval procedures for the APPP.

In November 2000, the nation faced the unusual circumstance of not knowing the winner of the election for President for several weeks. The results in Florida were contested, and the contest did not end until a decision by the U.S. Supreme Court. The public scrutiny resulting from that experience exposed a wide range of weaknesses with the American system of elections. Among them were poorly designed and outdated voting technology; inefficient and poorly administered registration systems; insufficient professionalism in the election workforce, especially pollworkers; problems with absentee voting; a confusing array of administrative procedures across jurisdictions; inadequate funding; problems with the processes for conducting election audits and recounts; and suspicions among many of alarming levels of voter fraud and intimidation. Although many jurisdictions suffered from few, if any, of these problems, they were sufficiently prevalent to cause widespread concern after the realization that they could, at least in some circumstances, have a significant impact on major elections. Many of the weaknesses had been known for years by election administrators, but they had been unsuccessful at drawing sufficient attention to them to effect the needed improvements. The situation began changing when several commissions and studies examined what had happened in Florida and made recommendations. Both the House and the Senate held several hearings during the first session of the 107 th Congress. Some states made plans or began to replace voting equipment and adopt other improvements. In December 2001, the House passed H.R. 3295 , the Help America Vote Act. In early 2002, the Senate debated and passed S. 565 , the Martin Luther King, Jr. Equal Protection of Voting Rights Act, after adopting 40 amendments. After conference negotiations, a compromise bill, the Help America Vote Act of 2002 (HAVA, P.L. 107 - 252 ) was enacted in October. The act created a new federal agency with election administration responsibilities, set requirements for voting and voter-registration systems and certain other aspects of election administration, and provided federal funding; but it did not supplant state and local control over election administration. Issues for the 108 th Congress included funding, establishment of the new agency, and implementation by and impacts on the states. Issues for the 109 th Congress included problems identified pursuant to the November 2004 Presidential election, as well as implementation by states of HAVA requirements, response to Hurricanes Katrina and Rita, and the security of voting systems. In addition to funding, issues for the 110 th Congress have included those that arose in the 2006 election, as well as voter-verified paper audit trail requirements for electronic voting machines, photo identification, poll worker training, and prohibiting deceptive practices. Despite considerable effort by Congress to alleviate difficulties for military and overseas voters, there remain a number of hurdles to participation. Congress may consider several options for easing them. Other issues that might be considered in the 110 th or 111 th Congress are associated with voting systems standards, remote voting (absentee, early, and Internet), election personnel, polling places, election security, and the electoral college. This report discusses how HAVA addresses those and other issues, and their potential legislative implications. HAVA established a new federal agency, the Election Assistance Commission (EAC, http://www.eac.gov ), to replace the Office of Election Administration (OEA) of the Federal Election Commission (FEC) and also to perform new functions. The EAC is an independent, bipartisan federal agency. HAVA authorized funding for it only through FY2005, but the agency has continued to be funded at or above authorized levels. Members are appointed to four-year terms and may be reappointed once. The act also established two boards, with broad-based state and local membership, and a technical committee, to address aspects of voting system standards and certification. The main duties of the EAC include carrying out grant programs, providing for testing and certification of voting systems, studying election issues, and issuing voluntary guidelines for voting systems and the requirements in the act. The commission does not have any new rule-making authority and does not enforce HAVA requirements. The law provides for technical support and participation by the National Institute of Standards and Technology (NIST, see http://vote.nist.gov ) in relevant commission activities, including the technical committee. The initial establishment of the EAC was delayed for more than nine months beyond the statutory deadline of February 25, 2003, and funding for the commission for FY2004 was less than one-fifth the authorized level of $10 million. As a result, the commissioners did not hold their first public meeting until March 2004 and the EAC was significantly limited in its ability to provide assistance to states in preparation for the November 2004 election. It also had to delay beginning many of the tasks assigned to it by HAVA. It has subsequently, however, been staffed more fully and has engaged in major activities under its HAVA mandate. Among them are a recommended set of best practices for local election administrators released in August 2004, release of the federal Voluntary Voting System Guidelines in December 2005 with a revision in review in 2008, and completion of the distribution of payments to states (see below). HAVA established several grant programs for various purposes. Payments to states authorized by HAVA included $650 million under Title I to improve election administration and to replace punchcard and lever-machine voting systems and $3 billion over three years under Title II to meet requirements established by the act (see below). The first program was fully funded and all payments have been made. The second was funded at close to the $2.4 billion authorized through FY2004, but no additional funding was appropriated since then until FY2008, when Congress provided an additional $115 million. Other programs provide funding through the Department of Health and Human Services to make polling places accessible to persons with disabilities, and for state protection and advocacy systems to ensure electoral participation by persons with disabilities. HAVA also provided $20 million in grants for research and $10 million for pilot programs to improve voting technology, although neither of those programs have been specifically funded. Three small programs to encourage student participation in the voting and election process were established by the act, and they have received some funding. The remaining authorization for payments to help states meet the HAVA requirements may continue to be an issue, especially given the concerns of election officials about HAVA's impact on the costs of elections. Whether the levels of payments provided to states are sufficient to fund HAVA requirements is uncertain. Also contributing to this funding uncertainty is the continuing controversy over the security and reliability of the electronic voting systems promoted by HAVA's accessibility requirements (see below). Funding for all major programs was authorized by HAVA only through FY2005; however, Congress has continued to provide funding in subsequent fiscal years. One of the innovations in HAVA is the establishment, for the first time, of federal requirements for several aspects of election administration: voting systems, provisional ballots, voter information, voter registration, and identification for certain voters. Most of those requirements went into effect in January 2006. However, four went into effect earlier: (1) Any voter not listed as registered must be offered and permitted to cast a provisional ballot. This is a separate ballot that is set aside along with relevant information about the voter so that election officials can determine whether the person is entitled to vote. (2) Any ballots cast during a court-ordered extension of polling hours must be provisional. (3) A sample ballot and other voter information must be posted at the polling place on election day. (4) First-time voters who register by mail must provide specified identification either when submitting their registration or when voting. Also, the seven states that received title I payments to replace lever machines or punchcard voting systems and did not request a waiver were required to replace all those systems statewide in time for the November 2004 federal election. The provisional ballot requirement has been somewhat controversial, although broader use of such ballots was called for by all the major reports stemming from the 2000 election controversy (see above) and was included in both the original House- and Senate-passed versions of HAVA. States vary in how this requirement is implemented, and some of those interpretations have been subject to litigation. In some states a ballot is counted at least for some contests even if cast outside the voter's home precinct. In other states, provisional ballots are counted only if they are cast in the home precinct. If the policy governing provisional ballots is unclear to voters or pollworkers in a jurisdiction, a voter might be unintentionally disenfranchised, for example by inadvertently voting in the wrong precinct. Provisional ballots may be especially at issue in some close contests, where the outcome may not be known until provisional ballots are processed, which can take several days and may be subject to litigation. Congress could consider modifying this requirement to clarify its applicability to federal contests for ballots that are cast outside the home precinct. Also, provisional balloting may become less important as states continue to implement and gain experience with the statewide computerized registration lists that HAVA requires (see below). The voter-identification requirement was the subject of some controversy in the 2002 Senate debate on HAVA, causing a delay of several weeks in floor action. It does not, however, appear to have been particularly controversial in implementation so far. However, many states have broader identification requirements, and some of those have been controversial. Some questions have been raised about photographic identification requirements in particular. However, the U.S. Supreme Court has ruled that such voter-identification requirements are permissible. Beginning January 1, 2006, voting systems used in federal elections were required to provide for error correction by voters (either directly or via voter education and instruction), manual auditing for the voting system, accessibility to disabled persons (at least one fully accessible machine per polling place) and alternative languages, and needed to meet federal machine error-rate standards. Systems were also required to maintain voter privacy and ballot confidentiality, and states were required to adopt uniform standards for what constitutes a vote on each system. While HAVA does require a paper record that can be used for manual audit of a voting system, it does not require paper ballots. Also, states using voter registration needed to employ computerized, statewide voter registration systems that are accurately maintained. The 23 states that received title I payments to replace lever machines and punchcard systems and that requested a waiver of the 2004 deadline were required to replace those systems statewide before the first election for federal office in 2006. Finally, beginning in 2007, all new voting systems purchased with Title II requirements payments were required to be fully accessible for persons with disabilities. Many states began changing voting systems well before the HAVA requirements went into effect. For example, both Maryland and Georgia adopted statewide direct-recording electronic (DRE) voting systems, which meet the error-correction and accessibility requirements of HAVA and facilitate meeting the standard for what constitutes a vote. However, a separate controversy has arisen over the reliability and security of DREs, resulting in the adoption of a requirement for paper ballots in many states. In the case of DREs, paper ballots can be produced parallel to the electronic ballot and are available for inspection by the voter before the ballot is cast. This approach is called a voter-verified paper audit trail, or VVPAT. Alternatively, states may adopt a paper-based optical-scan voting system. Starting in the 108 th Congress, bills have been introduced that would require the use of paper ballots in federal elections. Whether Congress will enact such a requirement remains uncertain. Meanwhile, The EAC's technical committee, in the 2007 draft of the Voluntary Voting System Guidelines, or VVSG, (discussed below) has proposed that certified voting systems be required to provide a means of auditing the vote that is independent of the software used by the voting system. The proposal is consistent with HAVA's use of performance rather than design standards in its voting system provisions (SS301(a)). While paper ballots would meet this proposed requirement, it also permits the development of new systems that could provide levels of verifiability, security, and accessibility that are not possible with paper ballots. A specific design standard such as that contained in most of the introduced bills would preclude the use of such new systems and therefore most likely impede their development. However, such a specific design standard is arguably easier to implement and enforce than a performance standard. Some states have had difficulty replacing voting equipment to meet HAVA requirements or to meet the conditions of title I HAVA payments they received to replace equipment. Problems may also arise in other states that are changing voting systems, given the logistical complexities of the changeover in some cases. Most states waived the 2004 HAVA deadline for developing computerized statewide voter-registration lists and were therefore required to implement the new systems by January 2006. At least 11 states missed that deadline, although most claimed that they would be compliant before the first election of 2006. In addition, the absence of a clear national standard for the lists has led to uncertainties about implementation. Given the increase in new-voter registration in recent elections and recent closely contested presidential elections, some other issues have also arisen. Among them are questions about the validity of new registrations, concerns about various kinds of fraud and abuse, and the impacts of attempts to challenge the validity of voters' registrations at polling places. Making informed decisions about the above and other issues depends in part on the availability of accurate and comparable information from jurisdictions. However, state and local jurisdictions vary in what data they collect and make publicly available. While the EAC is responsible under HAVA for performing research on various aspects of election administration, it has no authority to ensure that the necessary data are provided by jurisdictions. If those data prove difficult for the EAC to obtain, Congress might wish to consider providing the agency with the authority needed to acquire them. For FY2008, Congress provided the EAC with $10 million for grants to states to improve data collection. After the 2000 election, both the Defense Authorization Act of 2002 and HAVA amended the Uniformed and Overseas Citizens Absentee Voting Act of 1986 (UOCAVA) to improve the voting process for members of the military, their family members, and Americans living overseas. Just before the November 2004 election, the President signed the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 ( P.L. 108 - 375 ), which included provisions to ease the use of the federal write-in ballot, a substitute under certain conditions for the states' regular absentee ballots. Despite considerable effort by Congress to alleviate difficulties for military and overseas voters, there remain a number of hurdles to participation. The most prominent are timing and the reliance on military and overseas mail to receive and return registration and ballot applications and the ballots themselves. Some states permit returning voting materials by fax, but privacy concerns have been raised about this option. The Defense Authorization Act for 2005 expanded the use of the federal write-in ballot to those in the military who were not deployed abroad but were away from their voting jurisdiction because they are on active duty. Nonetheless, delays in printing absentee ballots because of late-occurring primaries, delays in sending out ballots from the states, and delays with the mail reportedly continued with primary and general elections in 2004. Problems continued in the 2006 elections as the EAC reported that only 33% of ballots requested by military and overseas voters were counted in the election, with 70% having been returned to election officials as undeliverable. There are few options to fix timing problems, but Congress could consider requiring an information campaign well in advance of the election to alleviate the glut of registration and ballot applications that typically arrive within two months of election day. Improvement in this area might be expected following the October 2007 launch of the Overseas Vote Foundation's website to assist UOCAVA voters with registration and ballot requests. And while each state was required to designate a single office to administer the law, an additional requirement for a hotline telephone number in each state could ease difficulties for individual voters. The Federal Voting Assistance Program provides both domestic and overseas toll-free numbers. Expanded use of the federal blank ballot without restrictions could eliminate the problem of waiting for the state absentee ballot, but would limit voting to federal offices only unless a state decided otherwise. In addition to voting system requirements, HAVA required the EAC to develop the Voluntary Voting System Guidelines (VVSG) to replace the Voluntary Voting Systems Standards (VSS) developed under the auspices of the FEC and first issued in 1990. They apply to both computer hardware and software and have been adopted in whole or in part by most states. An updated version of the VSS was released in 2002. The EAC released the first version of the VVSG in December 2005. Developed in cooperation with NIST, those guidelines are only a partial revision of the VSS, with new or revised sections on security, human factors, conformance, and certain testing procedures. They went into effect in December 2007. A more thorough revision is in progress. A voluntary certification program for voting systems was also developed by the National Association of State Election Directors (NASED) to verify conformance with the VSS . HAVA gives responsibility for establishing testing and certification procedures to the EAC, with NIST playing an advisory role and developing a laboratory accreditation program. The EAC has accredited some laboratories for testing and certification of voting systems under the VVSG. HAVA does not authorize specific funding for NIST support activities, but Congress has provided appropriations for those activities as part of the EAC funding. The delays and funding uncertainties experienced by the EAC were apparently a factor in the decision to revise only parts of the VSS for the first version of the VVSG . While HAVA stipulated that the most recent version of the VSS , last revised in 2002, would serve as the guidelines until the VVSG went into effect, the VSS have been widely criticized with respect to their scope, approach, and effectiveness. For example, the DREs for which significant security weaknesses have been identified had been certified as conforming to the VSS. The VVSG have been criticized on the one hand as placing an undue burden on manufacturers to comply with the two-year implementation window, and on the other as being insufficiently comprehensive, revising only part of the VSS . The provisions in the 2007 revision of the VVSG relating to security concerns about DREs, and its extensive revision to conform more closely to international standards and address other concerns with the earlier version, have also generated some controversy. In addition, there have been calls for increased openness and other changes to the certification process. No federal standards exist with respect to absentee ballots, although the EAC is required to conduct a study of absentee voting under HAVA. Voters in many states can request an absentee ballot only for specific reasons that would prevent the voter from casting a ballot in person. But according to the National Conference of State Legislatures (NCSL), 26 states in 2004 allowed any voter to request such a ballot, sometimes called "no fault" absentee voting. Oregon conducts its elections entirely by mail--all registered voters receive their ballots through the Postal Service. While the percentage of votes cast by absentee or mail ballot has been increasing in recent elections, some observers have expressed concerns that the method is more vulnerable to certain kinds of fraud and coercion of voters than is balloting at the polling place. Absentee ballots are perhaps the classic example of the legacy of state-by-state election administration. Eligibility, types of ballots used, deadlines for submission, and counting procedures and deadlines vary widely by state, and no uniform approach exists with any single element of absentee voting. Absentee voting is on the increase and some voters reportedly cast absentee ballots in 2004 to avoid using a DRE at the polling place to cast a ballot. It is not clear whether Congress will take any action with respect to absentee ballots, although the House Administration Committee reported H.R. 281 , the Universal Right to Vote by Mail Act of 2007 on April 14, 2008. The bill establish universal absentee voting by mail in all states and prohibit a state from counting an absentee ballot unless it matched the ballot envelope signature with the voter's signature on file. Other legislative remedies that could be introduced include establishing uniform procedures for sending out absentee ballots, counting methods, and deadlines. In some states, voters may cast a ballot in person before election day through an early voting program. There are many approaches, and the number of states using early voting is growing. According to the NCSL, 23 states had some form of it in 2004, whereas 13 states offered early voting in 2000. In some states, a voter can cast a ballot at multiple locations in the jurisdiction before election day, while in other states, the voter must visit the election official's office to do so. The days and hours for voting vary as well. Some observers have criticized early voting as distorting to the electoral process and being open to certain kinds of fraud and abuse. One disadvantage concerns late-occurring developments or issues in a campaign about which an early voter might have no knowledge. Also, because early voting is a form of remote voting, as opposed to casting a ballot at an assigned precinct, a greater possibility of committing fraud arguably exists. Proponents argue that early voting can increase turnout and lessen the risk of certain kinds of distortions. The increase in the number of states offering early voting suggests that the trend will continue. If the 110 th Congress takes up the issue, it may consider legislation to require all states to establish early voting programs or to require that voter rolls at polling places indicate which voters have cast ballots before election day. A Defense Department program to allow those in the military and their family members abroad to vote over the Internet was cancelled for 2004 after a report that noted it could be prone to tampering that might affect the election outcome. The 2004 program was to be an expanded version of a pilot program in 2000 in which 84 voters cast ballots over the Internet. As many as 100,000 voters might have cast ballots under the program in 2004. Arizona's Democratic party conducted a primary in 2000 in which approximately 40% of voters cast ballots over the Internet, although computer problems and access issues emerged after the voting. While little progress has been made in the development of Internet voting for public elections in the United States, other countries have begun implementing this method. The most prominent example is Switzerland, which has used Internet voting experimentally for several years. Different cantons use different approaches, with Neuchatel using an "end-to-end" system that provides true voter verifiability, which is not possible with paper ballot systems. Internet voting may continue on a limited basis for certain types of elections in the United States, such as Arizona's Democratic primary in 2000, or on an experimental basis, but security concerns are paramount. Given the emergence of security issues in voting in recent years, particularly those raised with respect to the use of DREs, enthusiasm for Internet voting has consequently declined in the United States. Efforts in the Defense Department to facilitate Internet voting are the most likely prospect for the immediate future. There are roughly 10,000 election jurisdictions in the United States, ranging in size from small rural jurisdictions with fewer than a thousand voters to large metropolitan jurisdictions with several million. For many jurisdictions, the administration of periodic elections is unlikely to be considered as high a priority as more regular needs such as schools and roads. Funding and personnel vary, with some jurisdictions having large, well-funded operations and others very small efforts with part-time staffing. The demographic profile of local election officials is unusual, especially for a professional group of government employees. According to the EAC, a federal election requires a total of about 2 million pollworkers nationwide. Most pollworkers are older citizens, many retired and elderly, although no reliable demographic information is available on them nationwide. They are usually required to work on election day from before polls open to well after they close, often a span of 14 hours or more. They are usually either unpaid or they receive only a small stipend. HAVA established two small programs to recruit college and high school students to work at the polls but has no other specific provisions regarding pollworkers. The level of training and expertise varies substantially among election administrators, and some observers believe that election administration needs to be more strongly developed as a profession, with concomitant expectations about expertise, certification, and adherence to professional codes of conduct. The reported age and number of pollworkers is also of concern to many, especially in elections with high turnout, and given the increased complexity of and role of technology in elections in the wake of HAVA. Many jurisdictions have apparently expressed concerns that recruiting enough pollworkers has become more difficult. An insufficient workforce at the polling place, or pollworkers who are insufficiently or improperly trained, especially if they are using new equipment, may lead to errors that can create problems for voters or even impact the outcome of an election. HAVA requires states receiving Title II requirements payments to submit plans to the EAC that describe, among other things, their plans for education and training of election officials and pollworkers with respect to meeting HAVA requirements. It does not specify expectations or require EAC guidance for that education and training. Should Congress decide to address issues relating to election personnel, it could establish a specific program to fund training of election officials and pollworkers, or it might require the EAC to establish a program to accredit organizations that create and administer certification programs for election administrators, as it is required to do for testing laboratories (Sec. 231(b)). The Help America Vote Act requires posting voting information at each polling place, mandates disability access to voting in all polling places through the use of at least one voting device that provides the same privacy and independence as for other voters, and requires voters who have registered by mail and have not voted in the jurisdiction to provide one of a number of acceptable forms of identification (see the discussion of these requirements in HAVA 2004 Requirements and HAVA 2006 Requirements above). Jurisdictions vary in the number and kinds of polling places used for an election. Some jurisdictions are experimenting with the use of vote centers, where any registered voter in the county can vote, instead of traditional precinct polling places. HAVA provides grants to improve the accessibility of polling places but does not establish new requirements. Provisional voting and voter-identification requirements have generated some controversy and could continue to do so as state legislatures revisit these topics, insofar as HAVA left the specific details of implementation to the states. With respect to both topics, states could modify voter identification requirements generally and the procedures for the use of provisional ballots, as some have. Challenging a voter's eligibility at the polling place emerged as an issue in the 2004 election, although HAVA is silent on this issue and state laws vary considerably with respect to who may challenge and under what circumstances. In some states, no challenges may be made except by a poll worker, while in others, partisan workers may be admitted to the polling place to observe the voting and may challenge a voter's eligibility. A related issue concerns proof of citizenship as a condition for registration. A number of bills have been introduced, but the issue first emerged at the state level when Arizona voters approved a 2004 referendum that required citizenship proof for voting. A number of Latino advocacy groups mounted a legal challenge to the law on the grounds that it is discriminatory, but a federal judge rejected the request for a temporary restraining order in June 2006. The number, distribution, and condition of polling places has also sometimes been an issue. It could potentially be addressed by establishing requirements such as a maximum number of registered voters or a maximum geographic area covered by a polling place. The security environment following the terrorist attacks of 2001 raised concerns before the 2004 elections that further attacks or other events might disrupt an election and even affect the outcome. Questions were raised about both postponement of elections and enhancement of security. The executive branch does not currently have authority to set or change the times of elections, a power reserved for Congress under the Constitution, although Congress may be able to delegate such authority. Either Congress or the states might also pass legislation in response to a terrorist attack that would change the timing of any elections that were affected. Some states have enacted statutes providing for the temporary postponement of elections. Many state statutes also grant the Governor the power to suspend certain state laws during an emergency. Those statutes might also be able to be used to postpone the general presidential election in the state during an emergency. However, actual postponement of elections has occurred in relatively few cases over the last 150 years. It is generally the responsibility of state and local governments to provide security at polling places. A guide for state election-security planning recommends establishment of planning teams and preparation for a range of possible scenarios. Reactions of state and local officials varied for the November 2004 election, with some making as few visible changes as possible and others increasing police presence or even moving polling places. Polling-place security issues were less prominent during the 2006 elections. Whether Congress considers actions to safeguard future elections may depend on events associated with them or with elections in other countries. Among the options are to take no legislative action, to explicitly delegate authority to the executive branch to the extent permitted by the Constitution, to provide mechanisms for improved coordination, and to encourage early and absentee voting. All these options have some potential benefits but also significant potential disadvantages. The President and the Vice President are elected indirectly by the electoral college, according to a compromise design that balanced equal representation from each of the states against population differences. The U.S. Constitution, in Article II, Section 1, Clause 2, as amended by the 12 th Amendment, together with a series of implementing federal statutes, provides the broad framework through which electors are appointed and by which they cast votes for President and Vice President. Nearly since its inception, the electoral college has engendered calls for reform. Among the criticisms are the possibility that no candidate achieves a majority of electoral college votes, resulting in election by the House of Representatives (as occurred in 1824); the election of a President and Vice President who win a majority in the electoral college, but do not win the popular vote (as happened in 1824, 1876, 1888, and 2000); the assignment of electoral votes, said to give less populous states an advantage because a state's vote equals the number of members of the House of Representatives (based on population) and the Senate (not based on population); and a perceived advantage for ethnic voters, whereby the concentrations of such voters in large states are said to benefit because of a tendency to vote as a group for a single candidate, thus increasing their comparative influence. In recent years, heightened interest in reforming the electoral college tends to coincide with closely contested presidential elections wherein the possibility exists that the electoral college winner does not win the popular vote. Despite the circumstances of the 2000 election, which focused national attention on the electoral college vote, subsequent reform efforts addressed election administration and voting issues, rather than reform of the electoral college. Reform proposals are routinely introduced in nearly every Congress, but the results from the 2004 election suggest that a public mandate for changing or abolishing the electoral college has yet to emerge.

In November 2000, the nation faced the unusual circumstance of not knowing the winner of the election for President for several weeks. The public scrutiny resulting from that experience exposed a wide range of weaknesses with the American system of elections. Many of the weaknesses had been known for years by election administrators, but they had been unsuccessful at drawing sufficient attention to them to effect the needed changes. In October 2002, Congress enacted the Help America Vote Act (HAVA, P.L. 107-252), which addressed many of those weaknesses. It created a new federal agency, the Election Assistance Commission (EAC), with election administration responsibilities. It set requirements for voting and voter-registration systems and certain other aspects of election administration, and it provided federal funding; but it did not supplant state and local control over election administration. The establishment of the EAC was delayed for several months beyond the statutory deadline, and it was initially funded at a fraction of the authorized level. As a result, many of the tasks assigned to it by HAVA were also delayed, although the agency has since been more successful at fulfilling its statutory tasks. HAVA established several grant and payment programs for various purposes, and Congress has appropriated more than $3 billion altogether for them. It is uncertain if current levels of funding are sufficient to meet HAVA goals and requirements. One of the innovations in HAVA is the establishment, for the first time, of federal requirements for several aspects of election administration: voting systems, provisional ballots, voter information, voter registration, and identification for certain voters. Those requirements are now in effect. Many states have changed voting systems to meet them. Controversy has arisen over the reliability and security of electronic voting, leading many states to adopt requirements for paper ballots. The provisional ballot requirement was one of four that went into effect in 2004, and it was also somewhat controversial. There is also still some question about implementation of computerized statewide voter-registration lists in some states. In addition to funding, issues for the 110th Congress include voter-verifiable paper audit trails and possibly photo identification, poll worker training, and prohibiting deceptive practices. Despite considerable effort by Congress to alleviate difficulties for military and overseas voters, there remain a number of hurdles to participation. Congress may consider several options for easing them. Other issues that might be considered are associated with voting systems standards, remote voting (absentee, early, and Internet), election personnel, polling places, election security, and the electoral college.

The size and scope of the federal workforce, along with the rights and responsibilities of federal agencies and their employees, has been the subject of various legislative proposals from Congress in recent years, and has also been an issue of focus for the Trump Administration. A major topic of interest concerns statutory limits on when federal employees can be removed or demoted for cause or performance-related issues. The current legal framework governing removal or demotion of federal employees originates from efforts to reform the nation's earlier "patronage" system for filling positions in the federal government. Under the "spoils system" that existed in the first century of the Republic, many federal government jobs were filled based upon "political contributions rather than capabilities or competence." Eventually, "strong discontent with the corruption and inefficiency of the patronage system of public employment" resulted in the passage of the Pendleton Act in 1883, which served as the "foundation of [the] modern civil service" and required that federal employees within the civil service be hired based on merit. A number of subsequent laws have further reformed the civil service system, although the modern framework governing the rights of most federal workers is the Civil Service Reform Act of 1978 (CSRA or Act), as amended. The CSRA "was designed to replace an 'outdated patchwork of statutes and rules' that afforded employees the right to challenge employing agency actions in district courts across the country." This patchwork had resulted in "wide variations" within different federal courts regarding the rights of federal employees. Against this backdrop, the CSRA created "a comprehensive system for reviewing personnel action taken against federal employees." It established "an integrated scheme of administrative and judicial review, designed to balance the legitimate interests of the various categories of federal employees with the needs of sound and efficient administration." The Act provides a variety of legal protections for federal employees, authorizes challenges to agency decisions, and funnels review of those challenges to the Merit Systems Protection Board (MSPB or Board), whose decisions are exclusively subject to review by the United States Court of Appeals for the Federal Circuit (Federal Circuit). Among other things, the CSRA establishes a statutory framework, codified in Title 5 of the U.S. Code , regulating specific actions taken by agencies against certain federal employees, including removal, demotion, and suspension. This report focuses on certain legal issues arising under a prominent type of action taken against federal employees--major adverse actions based on employee misconduct under Chapter 75 of Title 5's provisions. However, another important type of action taken by agencies against employees--performance-based actions under Chapters 75 and 43--is beyond the scope of this report. Moreover, this report primarily focuses on the CRSA's applicability to the competitive service. The requirements pertaining to Senior Executive Service (SES) members are thus only discussed briefly. Likewise, certain categories of employees at particular agencies that are exempt from the CSRA's requirements are largely excluded from discussion in the report. The report begins with a brief examination of an important principle that informs and supplements protections for federal workers--the constitutional protections afforded civil service employees by the Due Process Clause. These constitutional considerations not only inform the interpretation and application of the existing statutory rules governing adverse actions against federal employees, but may also establish baseline parameters for policymakers' consideration of proposals to modify the removal and demotion processes authorized under current law. The Due Process Clause of the Fifth Amendment requires the federal government to observe certain procedures when depriving individuals of life, liberty, or property. In addition to protecting against the deprivation of an individual's physical property, the Constitution also guards against the deprivation of certain "property interests" without due process. The property interests protected by the Due Process Clause are not themselves created by the Constitution; instead, those interests arise from an independent source, such as state or federal law. One important type of property interest that can be created by federal law is public employment. The Supreme Court has held that certain public employees have a constitutional property interest in their continued employment. In order for a public employee to have a property interest in continued employment, an employee must have a "legitimate claim of entitlement to it." Such an entitlement can arise when the government gives a public employee "assurances of continued employment or conditions dismissal only for specific reasons." The CSRA's requirement that covered employees may not be removed from federal service except for cause or unacceptable performance creates such an entitlement, bestowing a property interest in continued employment. The government thus cannot deprive covered employees of this property interest without due process. Of course, Congress is not required to give a property interest to federal employees in the first place; but once it does so, that property interest cannot be deprived without constitutionally adequate procedures. In other words, the CSRA gives covered employees a constitutionally protected property interest in continued employment, but that interest is protected both by the statute's procedural provisions and the requirements of due process. Precisely what procedures are constitutionally required before depriving individuals of a protected interest can vary. When deciding what process is due, courts balance three factors enunciated by the Supreme Court in Ma thews v. Eldridge : (1) "the private interest that will be affected by the official action"; (2) the risk of an erroneous deprivation and the probable value of additional procedures; and (3) the interest of the government. In general, the Court has made clear that individuals with a property interest in continued employment are entitled to notice of the proposed agency action and a "meaningful opportunity to be heard" before the government may deprive them of that interest. Prior to termination, an employee is thus "entitled to oral or written notice of the charges against him, an explanation of the employer's evidence, and an opportunity to present his side of the story." Importantly, the contours of this pre-deprivation hearing are dependent on the totality of the proceedings. In determining the type of procedures due process requires, courts will examine the entirety of the relevant procedures, including the available post-deprivation proceedings. Particularly when employees are entitled to a subsequent full hearing and judicial review, a less formal pre-deprivation proceeding is permitted. In conducting the balancing of factors pursuant to Mathews v. Eldridge , the severity of the deprivation is a key factor in determining what procedures due process requires. For example, the Supreme Court in Gilbert v. Homar upheld the immediate suspension --as opposed to removal--of a public employee, arrested and charged with a felony, because the Court concluded that when the government must act quickly, or it is impractical to deliver pre-deprivation procedures, post-deprivation procedures can satisfy due process. In the circumstance at issue in Homar , where an independent third party had made a probable cause determination that the employee committed a felony, a post-suspension opportunity to be heard could satisfy due process. Further, the scope of the right to be heard is not unlimited. The Supreme Court has held that it does not violate the Due Process Clause for an agency to take an adverse action against an employee for making "false statements in response to an underlying charge of misconduct." Employees are of course entitled to exercise a Fifth Amendment right not to incriminate themselves, but agencies may take this silence into consideration in determining the truth or falsity of a charge. While the CSRA's provisions provide statutory requirements of agency actions that effectively overlap with many constitutional requirements, due process sometimes requires protections beyond what the statute obviously requires. For instance, in the adverse action reviewed by the Federal Circuit in Stone v. Federal Deposit Insurance Corporation , an employee was removed by an agency official who had received ex parte communications regarding the employee, and these communications were not disclosed to the employee until after the removal decision was made. The Federal Circuit ruled that ex parte communications made to the decision maker containing "new and material information" violate due process because they prevent the employee from receiving notice of the reasons and evidence for the agency's decision. Similarly, in Ward v. United States Postal Service , the Federal Circuit ruled that this principle is not limited to consideration of conduct serving as the basis for the adverse action itself, but applies to an agency's determination of an employee's penalty as well. In Ward , the agency official responsible for determining the appropriate penalty to be imposed on the employee had received ex parte communications concerning the employee's conduct that were not disclosed to the employee. The Federal Circuit rejected a distinction between communications regarding the basis for the adverse action and those regarding the determination of the appropriate penalty that followed. The court ruled that, just as in Stone , a deciding official's receipt of new and material information via ex parte communications regarding an employee's penalty determination runs afoul of due process. Likewise, as explained in more detail below, in adverse actions where an agency seeks to show that removal of an employee promotes the efficiency of the service, certain "egregious" behavior establishes a rebuttable presumption that this standard is met. When established, this presumption "places an extraordinary burden on an employee, for it forces him to prove the negative proposition that his retention would not adversely affect the efficiency of the service." Consequently, the Federal Circuit made its view clear in Allred v. Department of Health and Human Services that due process requires the presumption actually be rebuttable by an employee's countervailing evidence. The CSRA contains an initial categorization of who counts as a federal employee and which particular employees are covered under its various procedural protections. These classifications are important because, among other things, the CSRA functions as the "comprehensive" legal framework governing certain type of actions taken by agencies against employees. As such, potential claims of certain federal workers not covered by particular provisions of the CSRA may be precluded because of the comprehensive scope of the CSRA. The statute defines the civil service generally as "all appointive positions in the executive, judicial, and legislative branches of the Government of the United States" except for the armed forces and the uniformed forces. It further categorizes civil service federal government employees into three groups: SES employees, competitive service employees, and excepted service employees. SES employees are high-level positions in the federal government above the grade of General Schedule 15. Career SES members are selected according to a merit-based system, and they operate functionally as a link, through successive presidential administrations, between career staff and the political appointees who head federal executive agencies. The CSRA's requirements for SES employees, including hiring and performance reviews, are distinct from those of competitive service and excepted service employees and are beyond the scope of this report. In general, federal civil service employees are in the competitive service. The competitive service generally covers all civil service positions within the executive branch except those that are (1) SES positions; (2) filled via appointment by the President following Senate confirmation; or (3) excepted from the competitive service via statute. By statute, certain positions not in the executive branch and positions in the government of the District of Columbia may be specifically included in the competitive service. Finally, excepted service employees are civil service employees who are not in the SES or the competitive service categories. The primary procedural protections under the CSRA for agency actions taken against employees for misconduct are contained in Chapter 75 of Title 5. Subchapter II of Chapter 75 provides various procedural protections for certain government employees subjected to "major adverse actions." Those adverse actions include removals, suspensions for more than 14 days, reductions in grade or pay, and furloughs of 30 days or less. Agencies may only take a major adverse action against an employee "for such cause as will promote the efficiency of the service." The Federal Circuit has interpreted "efficiency of the service" to involve consideration of "the work of the agency," "the agency's performance of its functions," and "the employee's job responsibilities." These protections of Chapter 75 apply only to covered employees. These include individuals in the competitive service who are not serving in a probationary period or have generally completed one year of continuous service; preference eligibles in the excepted service who have completed one year of continuous service in an executive agency, the Postal Service, or the Postal Regulatory Commission; and other select individuals in the excepted service who are not preference eligible. When taking an adverse action against covered employees, the agency must give 30 days' advance written notice before taking action. Employees also are entitled to an attorney or representative, a reasonable time to respond orally and in writing, and a written decision from the agency describing its reasons for taking action. After the agency has reached its decision, covered employees may appeal to the MSPB, which is empowered to review the case. If the employee is the prevailing party on appeal, the Board may potentially order remedies including reinstatement, backpay, and attorney's fees. When reviewing an employee's appeal of a major adverse action, the MSPB will uphold the agency's decision "only if [it] is supported by a preponderance of the evidence." The "agency must establish three things to withstand challenge" to its decision: (1) it must show by a preponderance of the evidence "that the charged conduct occurred"; (2) it must "establish a nexus between that conduct and the efficiency of the service"; and (3) it must show "that the penalty imposed is reasonable." Following the MSPB's decision, employees may appeal the Board's decision to the Federal Circuit, which has "exclusive jurisdiction" over the MSPB's final decisions. On appeal from the MSPB's decision, the Federal Circuit will uphold the Board's decision unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"; "obtained without procedures required by law, rule, or regulation having been followed"; or "unsupported by substantial evidence." As mentioned above, to sustain an adverse action against a covered employee under Chapter 75, the agency must show that its decision was made "for such cause as will promote the efficiency of the service." This means that, in addition to showing that the charged conduct actually occurred, the agency must also establish by a preponderance of the evidence that there is a "nexus" between the employee's misconduct and either "the work of the agency" or "the agency's performance of its functions." Certain on-duty offenses, such as an unauthorized absence without leave, are "inherently connected to the efficiency of the service." And other on-duty behavior may easily satisfy this standard as well, such as when misconduct occurs on agency property and involves agency personnel, or in circumstances where an employee refuses to follow legitimate instructions. However, agencies sometimes bring adverse actions against covered employees for off-duty misconduct as well. As explored in detail in the following sections, the MSPB has noted three circumstances in which an agency may establish a nexus between off-duty misconduct and the efficiency of the service. First, in certain egregious circumstances, the type of misconduct committed by the employee creates a rebuttable presumption of a nexus. Second, an agency may show by a preponderance of the evidence that the misconduct "adversely affects the appellant's or co-workers' job performance or the agency's trust and confidence in the appellant's job performance." Finally, the agency may demonstrate by a preponderance of the evidence that the employee's misconduct interfered with or adversely affected the agency's mission. The Federal Circuit has determined that certain egregious conduct presumptively satisfies the nexus requirement when that behavior "speaks for itself." When such behavior is shown, the agency establishes a rebuttable presumption that there exists a nexus between the misconduct and the efficiency of the service. For example, that court has affirmed the Board's ruling on various occasions that off-duty criminal misconduct involving sexual abuse of a minor is sufficiently egregious to establish a rebuttable presumption of a nexus. Similarly, the Federal Circuit "has consistently held that involvement in drug trafficking, even when limited to off-duty conduct, is sufficiently 'egregious' conduct to warrant a presumption of nexus." As mentioned above, however, due process requires this presumption to actually be rebuttable by the employee, so a finding of a nexus is not automatic. However, the Federal Circuit has required the MSPB to articulate clear and principled standards when determining that off-duty non-criminal misconduct establishes such presumption. In Doe v. Department of Justice , for instance, the MSPB sustained the agency's removal decision for an employee who had videotaped sexual encounters with women without their consent. Though that behavior did not appear to violate any laws in the employee's jurisdiction, the Board upheld the removal decision because that behavior was "clearly dishonest." The Federal Circuit vacated this decision, in part because "[t]o allow the Board decision to stand would be to recognize a presumed or per se nexus between the conduct and the efficiency of the service." The court ruled that the Board "failed to articulate a meaningful standard as to when private dishonesty rises to the level of misconduct that adversely affects the 'efficiency of the service.'" The use of "clearly dishonest" behavior as the basis to sustain a removal action, for the court, "inevitably risks arbitrary results, as the question of removal would turn on the Board's subjective moral compass." Without a clear guiding rule, employees would not know precisely what behavior was barred and agency officials might be able to "legitimize removals made for personal or political reasons." The court thus remanded the case to the Board to "articulate a meaningful standard as to when private misconduct that is not criminal rises to the level of misconduct that affects the efficiency of the service." Aside from situations where misconduct is so egregious that a nexus is presumed, the agency may also establish by a preponderance of the evidence that misconduct adversely affected the employee's or co-worker's job performance or the agency's trust and confidence in the employee's job performance. For example, the MSPB has upheld a removal in circumstances where an employee was convicted of aggravated assault and petty larceny, and agency officials had testified that they were concerned about the safety of fellow employees and the security of government property. The Board ruled in that case that the agency established that the employee's conduct adversely affected the agency's confidence and trust in her job performance. Likewise, the Board has upheld an agency's removal decision where the employee engaged in criminal behavior involving pointing a laser at a police helicopter and disrupting its flight. In this instance, the employee's duties involved regular interaction with the public as a representative of the agency. The MSPB found that the behavior "undermined [the employee's] effectiveness as a public spokesman for the agency." Finally, an agency can establish a nexus by showing that an employee's off-duty misconduct interferes with the agency's mission. This can apply to the agency's mission as a whole or the employee's specific job duties. For example, the MSPB has upheld an adverse action against federal correctional officers for smoking marijuana while off-duty because that behavior was "antithetical to the agency's law enforcement and rehabilitative programs that [the employees] are responsible for monitoring." Even though the misconduct might not have affected the employees' job performance, public awareness of the behavior would undermine confidence in the agency, "thereby making it harder for the agency's other workers to perform their jobs effectively." The Federal Circuit has also upheld an adverse action where a civilian employee of the Marine Corps for the Morale, Welfare, and Recreation Department (MWR) engaged in an adulterous affair with the wife of a deployed Marine who was part of a unit that the employee was directly responsible for supporting. The court noted that although such behavior was not sufficient to support an adverse action against an employee in every civil service position, the employee's position here was unique because it required him to support Marine families, including the families of Marines deployed overseas. The trust and confidence of Marine families was essential to the MWR's mission and the employee's particular job responsibilities; trust that was undermined by the employee's actions. As mentioned above, in order to sustain a major adverse action under Chapter 75, an agency must establish that the charged conduct occurred and that there exists a nexus between that conduct and the efficiency of the service. In addition, an agency must show that the imposed penalty is reasonable. The Board has authority to review, and mitigate when warranted, the agency's penalty determination according to the factors outlined in Douglas v. Veterans Administration . Those factors are (1) The nature and seriousness of the offense, and its relation to the employee's duties, position, and responsibilities, including whether the offense was intentional or technical or inadvertent, or was committed maliciously or for gain, or was frequently repeated; (2) the employee's job level and type of employment, including supervisory or fiduciary role, contacts with the public, and prominence of the position; (3) the employee's past disciplinary record; (4) the employee's past work record, including length of service, performance on the job, ability to get along with fellow workers, and dependability; (5) the effect of the offense upon the employee's ability to perform at a satisfactory level and its effect upon supervisors' confidence in the employee's ability to perform assigned duties; (6) consistency of the penalty with those imposed upon other employees for the same or similar offenses; (7) consistency of the penalty with any applicable agency table of penalties; (8) the notoriety of the offense or its impact upon the reputation of the agency; (9) the clarity with which the employee was on notice of any rules that were violated in committing the offense, or had been warned about the conduct in question; (10) potential for the employee's rehabilitation; (11) mitigating circumstances surrounding the offense such as unusual job tensions, personality problems, mental impairment, harassment, or bad faith, malice or provocation on the part of others involved in the matter; and (12) the adequacy and effectiveness of alternative sanctions to deter such conduct in the future by the employee or others. The MSPB is not permitted to independently determine the appropriate penalty. Instead, the choice of penalty is given to the employing agency and will only be overturned if unreasonable in light of the relevant Douglas factors. The MSPB will thus "modify a penalty only when it finds that the agency failed to weigh the relevant factors or that the penalty the agency imposed clearly exceeded the bounds of reasonableness." An important consideration in weighing these factors is whether similar offenses are treated in a comparable manner. In certain circumstances, the Board's finding that an agency treated analogous employee situations disparately can result in mitigation of the agency's penalty. In order to make a claim that an agency treated an employee unfairly compared to similarly situated employees, the "charges and the circumstances surrounding the charged behavior must be substantially similar." The employee must show that there is "enough similarity between both the nature of the misconduct and the other factors to lead a reasonable person to conclude that the agency treated similarly-situated employees differently, but the Board will not have hard and fast rules regarding the 'outcome determinative' nature of these factors." If an employee establishes this, the agency must then show that it had a legitimate reason for the different treatment by a preponderance of the evidence in order to sustain the penalty. Nevertheless, this is not to imply that agencies are barred from changing their policies. If an agency has applied a lenient policy in the past but wishes to apply a more stringent one in the future, it may do so as long as it effectively notifies its employees of the change. As mentioned above, the procedural protections for major adverse actions in Chapter 75 include removals, demotions, furloughs for less than 30 days, and suspensions for more than 14 days. A suspension "means the placing of an employee, for disciplinary reasons, in a temporary status without duties and pay." However, the CSRA does not reference "indefinite suspensions," although agencies have routinely indefinitely suspended employees for certain behavior. Nevertheless, the Federal Circuit and the MSPB have ruled that indefinite suspensions for disciplinary reasons that last more than 14 days qualify as major adverse actions under subchapter II of Chapter 75. In addition, Office of Personnel Management (OPM) regulations that implement the statute expressly provide that indefinite suspensions are adverse actions. In order to sustain an indefinite suspension against a covered employee, therefore, an agency must satisfy the procedural requirements of Chapter 75 for major adverse actions. Consequently, just as in other major adverse actions, an agency may indefinitely suspend an eligible employee for more than 14 days only "for such cause as will promote the efficiency of the service." In practice, this means that the agency must show that the suspension was based on an authorized reason and that the suspension "bears a nexus to the efficiency of the service." The MSPB has also made clear its view that based on the statutory definition of "suspension" as a temporary status, indefinite suspensions "must have an ascertainable end." Although "the exact duration of an indefinite suspension may not be ascertainable, such an action must have a condition subsequent ... which will terminate the suspension." Finally, as in all adverse actions taken against an employee, including indefinite suspensions, the ultimate penalty imposed by the agency must be reasonable. The MSPB has noted that indefinite suspensions have satisfied 5 U.S.C. SS 7513(a)'s efficiency of the service standard in only three situations: (1) when there is reasonable cause to believe the employee has committed a crime carrying a sentence of imprisonment; (2) for certain medical reasons; and (3) when the employee's position requires access to classified information, but that access has been suspended. Pursuant to this authority, a prominent recurring issue regarding the federal civil service is the circumstances in which an agency can indefinitely suspend an employee for alleged criminal behavior. In such situations, while an agency normally must provide 30 days' advance notice of an adverse action, Chapter 75 provides that an agency may suspend an employee immediately if "there is reasonable cause to believe the employee has committed a crime for which a sentence of imprisonment may be imposed." As a threshold matter, events subsequent to the agency's decision cannot be mustered to support an indefinite suspension. The Federal Circuit has made clear that the "inquiry into the propriety of an agency's imposition of an indefinite suspension looks only to facts relating to events prior to suspension that are proffered to support such an imposition." Importantly, the relevant issue is whether the agency established reasonable cause, not whether the employee should be convicted for a crime. In other words, substantive defenses to criminal prosecution--such as, for example, that an employee's behavior does not truly constitute a crime--should be brought in a criminal trial, rather than as a challenge to the agency's decision. Further, the Board may not substitute its own reasoning for that of the agency; it must examine the agency's decision exclusively based on the grounds that the agency invoked. An agency may establish "reasonable cause to believe the employee committed a crime for which a term of imprisonment may be imposed" in several ways. In some cases, the agency may conduct its own investigation of the underlying facts and rely on those findings to support its decision. Often however, the agency cannot do so for various reasons. For example, an agency investigation into matters in a pending criminal investigation might unfairly force the employee to prematurely voice his or her defense. Consequently, an agency must sometimes rely on the accounts of third parties such as the police or courts to determine if the reasonable cause threshold has been met. In these circumstances, whether an agency has met that threshold appears to turn somewhat on the formality of the procedures used by the third-party entity. For example, the Federal Circuit has explained that "a formal judicial determination made following a preliminary hearing, or an indictment following an investigation and grand jury proceedings" is more than sufficient to satisfy the reasonable cause standard; in contrast, the mere arrest by a police officer without a probable cause finding is not. But in cases that fall in between these examples, the agency itself may need to delve into the record. For instance, if an arrest warrant based on probable cause was issued by a magistrate in an ex parte proceeding, the agency must "assure itself that the surrounding facts are sufficient to justify summary action by the agency," such as by examining the criminal complaints and supporting statements. In turn, the MSPB has ruled that because "reasonable cause" is "virtually synonymous with [the] 'probable cause' that is necessary to support a grand jury indictment," an indictment by a grand jury satisfies the "reasonable cause" standard. In such circumstances, the agency is under no obligation to conduct an independent investigation. However, in line with the Federal Circuit's jurisprudence, a grand jury determination is not necessarily required. For example, a probable cause determination by a judge at a preliminary hearing is sufficient. The MSPB has also upheld an agency's imposition of an indefinite suspension based on an employee's arrest and arraignment for a probation violation when the agency had information that the employee had previously been charged with a felony, had "entered into a deferred prosecution agreement," and could be imprisoned for the violation. In addition, the Board has ruled that a guilty plea to a felony offense is sufficient, as is a guilty plea to a criminal charge resulting in "Probation before Judgment," where violation of probation can trigger a final judgment imposing prison time. Under certain circumstances, less formal findings can establish reasonable cause. The Board has upheld an indefinite suspension where the employee was charged with a misdemeanor and, although there was no formal probable cause determination because the employee was not in police custody at the time of arraignment, "the case against the appellant had proceeded to the point where the appellant had been ordered to appear for a jury trial." Employing a somewhat functional analysis to the issue, the Board in that case interpreted the misdemeanor complaint to be "comparable to an indictment" under state law. In addition, the Board has upheld a reasonable cause finding based on a criminal complaint, where the agency also examined documents offered in support of an arrest warrant and a police report. Similarly, the Federal Circuit has affirmed an agency's reasonable cause finding when the agency relied simply on a criminal complaint and a sworn statement explaining the applicable charges against an employee. The combination of third-party findings and the agency's own investigation may also support a reasonable cause finding, even if one alone were insufficient to do so. For example, when criminal proceedings alone do not justify a reasonable cause finding, such as before a pending judicial probable cause hearing, an employee's implicit admission to the investigating agency of his or her guilt can satisfy the threshold requirement. In contrast, the Board has held that an agency may not indefinitely suspend an employee based simply on the agency's investigation into allegations that criminal conduct might warrant an adverse action. In other words, the mere fact of an agency investigation, in itself, is not sufficient "cause" to take adverse action against an employee; an agency must instead show that it already has reasonable cause to believe the employee has committed a crime which carries a potential prison sentence. Likewise, the Board has generally required the agency to establish evidence "sufficient to support a grand jury indictment." If the agency has only shown "mere suspicion" of criminal conduct, the Board will reverse the agency's decision. For example, the MSPB has ruled that an agency's reliance on the written statements of three government contractors, without more, "fall[s] drastically short of the level of proof required to prove reasonable cause." The simple fact of an employee's arrest or issuance of an arrest warrant will generally not meet this standard. Instead, the Board has required agencies to conduct further investigation to establish reasonable cause. For example, in one instance, the agency's reasonable cause finding was based on the employee's arrest (which had not been effectuated pursuant to a formal probable cause determination), a newspaper report describing the crime, and a conversation with the employee. The Board ruled that reasonable cause had not been established. In reaching this conclusion, the MSPB observed that the newspaper report was brief; the conversation with the employee was ambiguous as to what the employee admitted; and the agency failed to investigate the official police reports, criminal complaint, or witness statements. Similarly, the MSPB rejected an indefinite suspension where the agency relied on the fact of an arrest and a conversation with the employee where he admitted that he had been arrested and incarcerated. The Board in that case noted that because the arrest constituted the primary justification for the employee's indefinite suspension, consistent with Federal Circuit case law, "the agency was required to satisfy itself that the surrounding facts were sufficient to justify the indefinite suspension action." However, the discussion with the employee, without more, did not satisfy this requirement. Likewise, the filing of a criminal information or complaint without a formal probable cause determination by a neutral magistrate generally will be "insufficient to establish reasonable cause." In order to sustain an indefinite suspension in such a case, the agency is required to take affirmative action to assess whether reasonable cause exists, such as by examining police reports or witness statements. Similarly, depending on the circumstances, an arrest and arraignment alone may not be sufficient to sustain an indefinite suspension. The Board has rejected an indefinite suspension where the agency relied only on the fact of an arrest and arraignment, along with news reports that the agency did not verify. In that case, in a footnote, the Board argued that an arraignment was irrelevant because it consisted simply of "the defendant appearing in court, the reading of the charges, and the defendant entering a plea." Because the agency relied on the arrest and did not take any affirmative action to investigate the matter beyond "read[ing] a newspaper," reasonable cause was not established. The circumstances in which federal employees may be removed from service are thus determined by a variety of legal considerations. The rights of federal employees are protected by both statutory and constitutional requirements. Through the CSRA, Congress has provided certain procedural protections to a number of civil servants, delineating the conditions under which agencies may take adverse actions against federal employees. In the context of adverse actions for misconduct, for example, agencies may only take actions "for such cause as will promote the efficiency of the service" and must abide by various procedural provisions that ensure employees have a sufficient opportunity to defend themselves. Because Congress has bestowed these statutory protections on the federal workforce, certain employees have a property interest in continued employment that cannot be taken away without due process. Those constitutional protections thus inform the interpretation of statutory rules regarding adverse actions against federal employees, as well as establish a baseline of protections that may inform consideration of proposals to modify the process of removing federal employees. Attention to all of these issues may occur if and when lawmakers consider amending the civil service laws.

Federal employees receive statutory protections that differ from those of the private sector, including more robust limits on when they can be removed or demoted. Although a number of laws apply to various aspects of the federal civil service system, the primary governing framework is the Civil Service Reform Act of 1978 (CSRA), as amended. The CSRA created a comprehensive system for reviewing actions taken by most federal agencies against their employees, and the act provides a variety of legal protections and remedies for federal employees. It also funnels review of agency decisions to the Merit Systems Protection Board (MSPB), subject to review by the United States Court of Appeals for the Federal Circuit (Federal Circuit). In addition to these statutory protections, the Due Process Clause of the Fifth Amendment requires the federal government to observe certain procedures when depriving individuals of life, liberty, or property. The CSRA's requirement that covered employees may not be removed from federal service, except for cause or unacceptable performance, creates a constitutional property interest in continued employment. The government cannot deprive covered employees of this property interest without adhering to due process requirements. Chapter 75 of Title 5 of the U.S. Code provides various procedural protections for certain government employees subjected to major adverse actions. Those adverse actions include removal, suspensions for more than 14 days, reductions in grade or pay, and furloughs of 30 days or less. Agencies may only take a major adverse action against an employee "for such cause as will promote the efficiency of the service." In order to sustain an agency's decision on appeal to the MSPB, an agency must show (1) by a preponderance of the evidence that the charged conduct occurred; (2) a nexus between that conduct and the efficiency of the service; and (3) that the penalty imposed by the agency is reasonable. The MSPB has noted three circumstances in which an agency may establish a nexus between off-duty misconduct (e.g., criminal activity) and the efficiency of the service. First, in certain egregious circumstances, the type of misconduct committed by the employee creates a rebuttable presumption of a nexus. Second, an agency may show by a preponderance of the evidence that the misconduct "adversely affects the appellant's or co-workers' job performance or the agency's trust and confidence in the appellant's job performance." Finally, the agency may demonstrate by a preponderance of the evidence that the employee's misconduct interfered with or adversely affected the agency's mission. The CRSA does not expressly reference "indefinite suspensions," but agencies have routinely indefinitely suspended employees for certain behavior. The Federal Circuit and the MSPB have ruled that indefinite suspensions for disciplinary reasons that last more than 14 days qualify as major adverse actions under Chapter 75. The MSPB has recognized that an agency may indefinitely suspend an employee to further the efficiency of the service in three situations: (1) when there is reasonable cause to believe the employee has committed a crime carrying a sentence of imprisonment; (2) for certain medical reasons; and (3) when the employee's position requires access to classified information, but that access has been suspended. A prominent recurring issue is when an agency may indefinitely suspend an employee for alleged criminal behavior occurring outside the workplace. Whether and when indefinite suspensions may be imposed on account of alleged criminal behavior may turn upon the facts relied upon by the agency when in assessing whether there is reasonable cause to believe the employee committed a crime carrying a sentence of imprisonment.

Federal forestry has historically been associated with agriculture, and with agriculture legislation. Forestry programs have been addressed in past farm bills and other agriculture legislation. This report provides brief background on the House and Senate Agriculture Committees' jurisdiction over forestry, with examples of bills addressed by the committees. It then presents information on the forestry provisions in the 2008 farm bill, the Food, Conservation, and Energy Act of 2008 ( P.L. 110-246 ), organized by provisions in the forestry title and other provisions. It concludes with some forestry issues that were debated and that might be discussed in the next farm bill. The Appendix includes a side-by-side description of the House, Senate, and enacted provisions. Both the House and Senate Committees on Agriculture have jurisdiction over "forestry in general" and acquired national forests. Thus, the committees have been able to exert considerable influence over federal forestry activities over the years. For example, the Forest and Rangelands Renewable Resources Planning Act of 1974 (RPA, P.L. 93-378 ; 16 U.S.C. SSSS 1600-1614) and the National Forest Management Act of 1976 (NFMA; P.L. 94-588 ), which guide Forest Service (USFS) planning and management, were both initially referred to the Agriculture Committees. More recently, the Healthy Forests Restoration Act of 2003 ( P.L. 108-148 ; 16 U.S.C. SSSS 6501-6591) was referred to and reported by the Agriculture Committees. In addition to forestry on federal lands, the Agriculture Committees have jurisdiction over forestry research and forestry assistance to states and to private landowners. Forestry research is governed largely by the Forest and Rangeland Renewable Resources Research Act of 1978 ( P.L. 95-307 ; 16 U.S.C. SSSS 1641-1647), which revised and updated the McSweeney-McNary Act of 1928. Forestry assistance is governed largely by the Cooperative Forestry Assistance Act of 1978 (CFAA; P.L. 95-313 ; 16 U.S.C. SSSS 2101-2111), which revised and updated the Clarke-McNary Act of 1924. Both laws were referred to and reported by the Agriculture Committees. Recent farm bills have also included forestry provisions, primarily addressing the forestry assistance programs. The 1990 farm bill (the Food, Agriculture, Conservation, and Trade Act of 1990, P.L. 101-624 ) contained a separate forestry title that: created four new forestry assistance programs; revised two existing forestry assistance programs; amended two forestry assistance programs; revised the administrative provisions for forestry assistance; created five special forestry research programs; amended three existing forestry research programs; authorized a private, non-profit tree planting foundation; and created a new USFS branch: international forestry. The 1996 farm bill (the Federal Agriculture Improvement and Reform Act of 1996, P.L. 104-127 ) included only a few forestry provisions, extending the authorization for the one expiring assistance program and adding a new funding option within an existing program. The 2002 farm bill (the Farm Security and Rural Investment Act of 2002, P.L. 107-171 ) contained a separate forestry title. The conference could not resolve many of the differences between the House and Senate forestry provisions, and thus the conference report contained fewer provisions than either. (Some of the disputed provisions were enacted subsequently in the Healthy Forests Restoration Act.) Numerous programs were created, modified, and/or extended in the forestry title of the 2008 farm bill (Title VIII). The various provisions can be sorted into two groups: provisions amending the Cooperative Forestry Assistance Act (CFAA), and other provisions. The CFAA provides various types of forestry assistance to states and private landowners. The 2008 farm bill modified several of the provisions, adding new requirements, authorizing new programs and spending, and otherwise modifying forestry assistance programs. One significant aspect of the 2008 farm bill was the lack of a private forest landowner assistance program, which the Administration had proposed to terminate. The Forest Land Enhancement Program (FLEP) was created in the 2002 farm bill. It was not reauthorized, and thus has expired. FLEP funding ended earlier; funds were borrowed for wildfire suppression, a small portion was repaid, and other funds cancelled. In the end, only about half of the $100 million of mandatory spending enacted in 2002 was actually spent on the program. This marks the first time since the CFAA was enacted in 1978 that no such forest landowner financial aid program is authorized. The 2008 farm bill (SS 8001) established a new set of national priorities for federal assistance for private forest conservation. It added a new subsection to SS 2 of the CFAA: (c) Priorities.--In allocating funds appropriated or otherwise made available under this Act, the Secretary shall focus on the following national private forest conservation priorities, notwithstanding other priorities specified elsewhere in this Act: (1) Conserving and managing working forest landscapes for multiple values and uses. (2) Protecting forests from threats, including catastrophic wildfires, hurricanes, tornados, windstorms, snow or ice storms, flooding, drought, invasive species, insect or disease outbreak, or development, and restoring appropriate forest types in response to such threats. (3) Enhancing public benefits from private forests, including air and water quality, soil conservation, biological diversity, carbon storage, forest products, forestry-related jobs, production of renewable energy, wildlife, wildlife corridors and wildlife habitat, and recreation. Thus, the 2008 farm bill requires that forestry assistance aim to conserve working forests, protect and restore forests, and enhance public benefits from private forests. The 2008 farm bill (SS 8002) requires each state to conduct a statewide assessment of forest resource conditions, trends, threats, and priorities to receive federal forestry assistance funds. Each state also must prepare a strategy for addressing the identified threats, and describe the resources needed to address those threats. The states were to prepare the initial assessment and strategy, with updates as needed, and to coordinate with specified agencies and groups. The Secretary may use up to $10 million annually for FY2008-FY2012 of appropriated forestry assistance planning funds to assist states with their assessments and strategies. The farm bill (SS 8003) amended the CFAA to establish a Community Forest and Open Space Conservation Program. The program provides grants to local governments, Indian tribes, or nonprofit organizations to acquire lands threatened by conversion to non-forest uses and that provide economic, environmental, educational, and recreational benefits and serve as models of sustainable forest stewardship for other landowners. The grants may be up to 50% of the acquisition cost, with the authorization for "such sums as are necessary." This program is similar to the Forest Legacy Program, which authorizes the federal acquisition, or grants to states for their acquisition, of lands or easements on lands threatened by conversion to non-forest uses. The bill (SS 8005) replaced the existing USDA Coordinating Committee with a new Forest Resource Coordinating Committee, composed of the heads of four USDA agencies (and chaired by the Chief of the Forest Service) and representatives of state agencies, academia, and interest groups. The Committee is to provide coordination and direction to the USDA agencies and to coordinate with state agencies, focused on achieving the national priorities identified above. The 2008 farm bill (SS 8007) requires the Secretary to allocate a portion of funds available under the CFAA on a competitive basis. The portion to be competitively allocated was "to be determined by the Secretary," in consultation with the Forest Resource Coordinating Committee. The bill (SS 8008) also allows the Secretary to competitively allocate up to 5% of cooperative assistance funding for "innovative national, regional, or local education, outreach, or technology transfer projects" that contribute substantially to achieving the national priorities. These projects require a 50% matching contribution. The farm bill (SS 8203) added an Emergency Forest Restoration Program to the existing Emergency Conservation Program under Title IV of the Agricultural Credit Act of 1978 ( P.L. 95-334 ; 16 U.S.C. SSSS 2201-2205). The original program focused on emergency protection and rehabilitation of wind- or water-eroded agricultural lands. The expanded program provides up to 75% of the costs (up to $50,000 annually) for landowners to rehabilitate or restore forest lands damaged by storms, fires, drought, invasive species, or insects or diseases. Subtitle B (SSSS 8101-8107) addressed authorities for cultural and heritage cooperation. One section authorizes the use of national forest lands, with federal assistance for reburial of human remains and cultural items. Another section authorizes temporary closures of national forest lands historically used by Indians to assure access for traditional and cultural uses. A third section authorizes free use of trees and forest products for traditional and cultural (but not commercial) purposes. The final substantive section generally prohibits disclosure of information on reburials as well as information on tribal resources, cultural items, uses, or activities. The 2008 farm bill reauthorized and/or extended several programs through 2012: SS 8201, the Rural Revitalization Technologies Program, under SS 2371(d)(2) of the Food, Agriculture, Conservation, and Trade Act of 1990 (the 1990 farm bill; 7 U.S.C. SS 6601(d)(2)); SS 8202, the Office of International Forestry, under SS 2405(d) of the Global Climate Change Prevention Act of 1990 (Title XXIV of the 1990 farm bill; 7 U.S.C. SS 6704(d)); and SS 7413, the Renewable Resources Extension Act of 1978 ( P.L. 95-306 ; 16 U.S.C. SSSS 1671-1676). The bill (SS 8205) also extended and modified funding for the Healthy Forest Reserves. These reserves had been authorized through 2008 in the Healthy Forests Restoration Act of 2003 ( P.L. 108-148 ; 16 U.S.C. SSSS 6571-6578). The extension requires the Secretary to provide $10 million annually for the program from the Commodity Credit Corporation for FY2008-FY2012. The farm bill (SS 8204) amended the Lacey Act Amendments of 1981 ( P.L. 97-79 ; 16 U.S.C. SSSS 3371-3378) to expand the restrictions on and penalties for importing wild plants or plant parts (e.g., logs and lumber) removed in violation of domestic or foreign laws. It excluded crops, cultivars, and plants and plant parts (e.g., seeds, roots, and cuttings) intended for planting in the United States. It also expanded and clarified for plants the definition of taken or possessed illegally, and establishes a process for legal plant imports. The bill included provisions affecting national forest lands: SSSS 8301 and 8303, modifying the boundary of the Green Mountain National Forest (VT), and authorizing the sale or exchange of specific lands to the Bromley Mountain Ski Resort, with specific directions on using any proceeds generated by the sale or exchange; SS 8302(a)-(e), directing the conveyance, without consideration, of certain USDA lands in New Mexico to the Chihuahuan Desert Nature Park; and SS 8302(f), directing the conveyance, without consideration, of certain lands in the George Washington National Forest (VA) to the Central Advent Christian Church of Alleghany County. The farm bill (SS 8401) allowed purchasers of non-salvage USFS timber sale contracts awarded between July 1, 2004, and December 31, 2006, to request a modification to their contracts. The options available were to cancel a portion of the contract, to have the payment rate recalculated (called a rate redetermination ), or to substitute an approved Producer Price Index for the index specified in the contract. The Secretary may agree to the contract modification if the several specified terms and limitations are met. The 2008 farm bill (SS 8402) authorized a program of competitive grants for undergraduate scholarships to recruit, retain, and train Hispanics and other under-represented groups in forestry and related fields. The program was authorized through 2012 at "such sums as may be necessary." Forestry practices and woody biomass were addressed elsewhere in the 2008 farm bill, as well. Many conservation programs include forestry practices that qualify as conservation activities for cost-share assistance purposes. Also, many of the existing and proposed bioenergy programs include woody biomass as a possible feedstock. Programs that include forest-related activities, but are not focused primarily on these activities, are not included in this report; two specific woody fuel energy programs in the 2008 farm bill are described below. The provisions addressing softwood lumber imports from Canada and taxation of forests and forestland owners are also discussed briefly. The conservation title of the 2008 farm bill (Title II) modified numerous agricultural conservation programs to include forestry practices on nonindustrial private forest lands as approved activities for the program. Forestry practices and nonindustrial private forest lands are now accepted for the Conservation Stewardship Program (Subtitle D), Farmland Protection and Grassland Reserve (Subtitle E), Environmental Quality Incentives Program (Subtitle F), and other conservation programs (Subtitle G). In addition, SS 2709 added a new SS 1245 to the 1985 farm bill (the Food Security Act of 1985, P.L. 99-198 ) addressing environmental services markets. The section required technical guidelines to facilitate the development of environmental services markets, with priority on carbon markets. It specified that the guidelines establish procedures to measure benefits, protocols to report benefits, and a registry to track benefits. It also specified that the guidelines provide for verification of the benefits, including possibly by independent third parties. While not establishing markets for environmental or ecosystem services (discussed below), the guidelines would likely create the infrastructure to allow such markets to develop. Imports of softwood lumber from Canada have been of concern to U.S. lumber producers for many years. A 2006 Softwood Lumber Agreement provided a temporary respite from the dispute, but some U.S. producers have asserted that the Canadian producers are not paying the export fees required by the agreement. A provision (SS 3301) in the agricultural trade and aid title of the 2008 farm bill (Title III) added a new Title VIII (Softwood Lumber) to the Tariff Act of 1930 (19 U.S.C. SSSS 1202 et seq.). The provision requires softwood lumber importers to declare imports and fees paid, allowing the federal government to verify and reconcile data on softwood lumber imports and to assure implementation of the Agreement. The energy title of the 2008 farm bill (Title IX) included two provisions to expand the use of woody biomass in energy production. Both provisions are in SS 9001, which revises the energy title of the 2002 farm bill (also Title IX). The first provision (SS 9012) created a competitive research-and-development grant program for using woody biomass, with priorities for low-value biomass, processes integrated with biorefineries, wood-derived transportation fuels, and improved yield from energy plantations. Funding was authorized at $5 million annually for FY2008-FY2012. The other provision (SS 9013) created a new Community Wood Energy Program. This is a grant program for state and local governments to develop a community wood energy plan and acquire wood energy systems for public buildings. Project priorities are to be determined considering energy efficiency and appropriate conservation and environmental criteria. The state or local government monies are required to match the federal grant. Funding was authorized at $5 million annually for FY2008-FY2012. The tax and trade provisions of the 2008 farm bill (Title XV) included provisions affecting forests and forest landowners. The first (SS15316) authorized, in limited amounts, tax-exempt private activity bonds whose proceeds are to be used to finance private forest conservation efforts. This would allow, for example, a non-profit organization to use tax-exempt bonds to acquire private timberlands that were threatened with conversion to non-forest uses, such as residential developments. Another provision (SS 15311) added a new SS 1203 to the Internal Revenue Code to permit taxpayers to elect to deduct up to 60% of any timber gains from taxable income. The remaining 40% would be taxed at ordinary-income rates. Finally, several provisions (SSSS 15312-15315) altered and clarified the tax treatment of timber real estate investment trusts (REITs). In recent years, most wood products companies that own timberlands have separated the timberlands from wood processing (and other) operations, with the timberlands administered under a REIT because of more favorable tax treatment for REIT timber income than for wood processing company timber income. The provisions in the 2008 farm bill were to clarify, update, and make minor modifications to timber REIT taxation. Reauthorization of the many agriculture programs is a prime reason for the periodic farm bills, but most forestry programs are permanently authorized. This may reduce the pressure to include a forestry title in upcoming farm bills. Nonetheless, interest groups have raised various forestry issues other than the authorization levels for possible discussion within a future farm bill, such as forestry assistance funding, wildfire protection, invasive species, economic diversity, and markets for ecosystem services that have not traditionally been marketed. Federal funding for forestry assistance programs has generally been rising, but the increase has not been spread equally among the various programs. Since the severe 2000 fire season and the development of the National Fire Plan, funding for cooperative fire programs (assistance to states and volunteer fire departments) has risen substantially (more than triple pre-2000 funding), and has remained at very high levels. Funding for Forest Legacy (acquisition of lands or easements on lands threatened with conversion to non-forest uses) has also risen substantially, from less than $4 million in FY1998 to $50 million or more annually since FY2001 (and a request of $100 million for FY2005). In contrast, the Administration has proposed terminating funding for the Economic Action Program (economic assistance to rural, forest-dependent communities), and funding has fallen from a peak of $54 million in FY2001 to less than $5 million in FY2008 (with no funds in FY2007). The adequacy of funding for private landowner assistance programs has been a concern for many. These programs have provided cost-shares to qualified landowners for various forestry practices that increase tree growth, improve wildlife habitat, protect watersheds (thus improving water quality), and more. One of the changes enacted in the 2002 farm bill was to replace two programs--the Forestry Incentives Program (FIP) and the Stewardship Incentives Program (SIP)--with the Forest Land Enhancement Program (FLEP). Because funding for FIP and SIP had been discretionary and either stagnant (FIP) or absent (SIP), FLEP was given mandatory funding through the Commodity Credit Corporation of $100 million total through the end of FY2007. However, some FLEP funds were borrowed to pay for firefighting and other funding was cancelled; in total, about half of the $100 million "guaranteed" for FLEP was actually spent on landowner assistance. Even the existence of landowner cost-share assistance is in doubt. Forestry is included in many conservation programs that provide financial assistance to private landowners, but FLEP was not reauthorized in the 2008 farm bill. For the first time since 1978, no forestry-specific landowner assistance program is authorized. Some question whether a modest forestry-specific assistance program is needed, since a small share of the much larger conservation programs might provide more forestry assistance funding. Nonetheless, Congress may revisit the issue of separate funding for forest landowner assistance programs. The threat of wildfire damages to resources and property seems to have increased in recent years. Attention has focused on high biomass fuel levels (particularly in federal forests) and on homes in or near at-risk forests, an area known as the wildland-urban interface (WUI). The 2002 farm bill (SS 8003) created a new Community and Private Land Fire Assistance Program to assist communities and private landowners in planning and other activities to protect themselves from wildfires. The program was authorized at $35 million annually through FY2007 and "such sums as are necessary ... thereafter." The USFS has included such expenditures as authorized activities in its State Fire Assistance Program. However, Congress has not appropriated funds explicitly for this program. Protecting private lands and structures from wildfires continues to garner congressional attention, as the threat of wildfire persists. How to assist private landowners and communities, how to combine this assistance with other assistance and incentive programs, and how to fund such assistance could be debated in the farm bill context. Invasive species--non-native plants and animals that are displacing native ones--are becoming recognized as a substantial problem. In a speech to the Idaho Environmental Forum on January 16, 2004, then-USFS Chief Dale Bosworth identified invasive species as one of the four major threats to the nation's forests and rangelands. The USFS's Forest Health Management Program has evolved from a mechanism to survey and control insects and diseases, to a program to address all forest pests, including invasive species. Several times, the Bush Administration proposed an Emerging Pests and Pathogens Fund to address rapidly developing problems of invasive species, but the Appropriations Committees rejected the request both years. In its deliberations over a future farm bill, Congress could address the structure and financing of programs to prevent and control invasive species on federal, state, and private forests. The economies of many rural communities have evolved around the use--finding, extracting, processing, and selling--of natural resources. In some of these areas, one resource (e.g., timber, minerals, livestock) has traditionally dominated the local economy, but the economies of such areas can be devastated when that resource is depleted or when its markets are depressed (permanently or even temporarily). Many communities have sought approaches to diversifying their economies, to mitigate the economic and social disruption that can occur when a dominant economic sector is depressed. The National Forest-Dependent Rural Communities Economic Diversification Act of 1990 was enacted in SSSS 2372-2379 of the 1990 farm bill to authorize forestry and economic diversification technical assistance to "economically disadvantaged" rural communities. Under the title Economic Action Program , funding rose from $14 million in FY1996 to $54 million in FY2001, but has declined since, and President Bush has proposed terminating the program in several budget requests. In its future farm bill deliberations, Congress might consider ways to perpetuate economic assistance programs for traditional wood products-dependent communities, either as a continued USFS program or as part of other USDA rural assistance programs. Forests provide a broad array of environmental services--clean air and water, wildlife habitats, pleasant scenery, and more--for which private landowners are generally not compensated, because these services are typically not bought and sold in a marketplace. A variety of interests have examined the possibilities of finding ways to compensate landowners for continuing to provide ecosystem services. One means would be to develop such markets, and the 2008 farm bill included a provision (SS 2709, discussed above) that could facilitate such a development. Alternatively, some proposals are for federal "green payments" to directly reward farmers and other landowners who provide environmental benefits through their land management practices. Green payments for forest and other landowners' ecosystem services might be discussed in Congress's deliberations in a future farm bill.

The Food, Conservation, and Energy Act of 2008 (the 2008 farm bill) became law P.L. 110-246 when the House and Senate voted to override President Bush's veto on June 18, 2008. The conference agreement on the bill (H.R. 2419) had been enacted, vetoed by the President, and overridden (P.L. 110-234), but inadvertently excluded the trade title. Both chambers repassed the conference agreement (with the trade title) as H.R. 6124; it was again vetoed and again overridden as P.L. 110-246. The 2008 farm bill contained a forestry title and forestry provisions in other titles. General forestry legislation is within the jurisdiction of the Agriculture Committees, and past farm bills have included provisions addressing forestry, especially on private lands. Most federal forestry programs are permanently authorized, and thus do not require reauthorization in the farm bill. The forestry title (Title VIII) of the 2008 farm bill amended the Cooperative Forestry Assistance Act of 1978 (P.L. 95-313; 16 U.S.C. SSSS 2101-2114) in several ways. It added national priorities for forestry assistance, required statewide forest assessments, created a new community forest and open space conservation program (to protect forests threatened with conversion to non-forest uses), established a new Coordinating Committee, added an Emergency Forest Restoration Program, and authorized competitive allocation for some forestry assistance funding. The title also directed cooperation and collaboration with Indian tribes, amended the Lacey Act to restrict imports of illegally logged wood products, authorized changes to certain national forest timber contracts, and provided grants to Hispanic-serving institutions. In addition, it reauthorized and extended four existing programs. Other titles also contained provisions affecting forestry. The conservation title (Title II) modified most programs to include forestry activities and directed the creation of infrastructure for environmental services markets (including carbon markets). The trade title (Title III) included a section requiring lumber importers to report on imports and fees paid, to assure implementation of the 2006 U.S.-Canada Softwood Lumber Agreement. The energy title (Title IX) included woody biomass in many programs. Finally, the tax title (Title XV) included provisions to authorize new tax-exempt forest conservation bonds, to modify income deductions for qualified timber income, and to modernize and clarify the tax treatment of timber real estate investment trusts (REITs). Other forestry provisions were suggested by various interests, and might be considered in the next farm bill. Funding is one issue, as half the mandatory spending for the Forest Land Enhancement Program (FLEP) was cancelled and the program was not reauthorized. Protecting communities from wildfire continues to be a priority for some, while controlling invasive species is a priority for others. Assisting forest-dependent communities in diversifying their economies has also been debated. Finally, some have expressed interest in trying to provide payments for ecosystem services--forest values that have not traditionally been sold in the marketplace.

Declaring it necessary to bring to justice those responsible for the terrorist attacks on the United States of September 11, 2001, President Bush signed a Military Order (M.O.) authorizing the trial by military commission of certain non-citizens. The order directed the Secretary of Defense to establish the procedural rules for the operation of the military commissions convened pursuant to the M.O. The Department of Defense implemented regulations and convened commissions; however, one of the accused petitioned for habeas corpus in federal district court and the Supreme Court invalidated the regulations as inconsistent with the Uniform Code of Military Justice (UCMJ ) and the Geneva Conventions. This report provides a brief overview of procedural rules applicable in selected historical and contemporary tribunals for the trials of war crimes suspects. The chart that follows compares selected procedural safeguards employed in criminal trials in federal criminal court with parallel protective measures in military general courts-martial, international military tribunals used after World War II, including the International Military Tribunal (IMT or "Nuremberg Tribunal"), and the International Criminal Courts for the former Yugoslavia (ICTY) and Rwanda (ICTR). The chart identifies a selection of basic rights in rough order of the stage in the criminal justice process where they might become most important. The text of the chart indicates some of the procedural safeguards designed to protect these rights in different tribunals. Recognizing that fundamental fairness relies on the system of procedural safeguards as a whole rather than individual rules, the chart is intended only as an outline to compare some of the rules different courts and tribunals might use to safeguard certain rights. The Constitution imposes on the government a system of restraints to provide that no unfair law is enforced and that no law is enforced unfairly. What is fundamentally fair in a given situation depends in part on the objectives of a given system of law weighed alongside the possible infringement of individual liberties that system might impose. In the criminal law system, some basic objectives are to discover the truth, punish the guilty proportionately with their crimes, acquit the innocent without unnecessary delay or expense, and prevent and deter further crime, thereby providing for the public order. Military justice shares these objectives in part, but also serves to enhance discipline throughout the armed forces, serving the overall objective of providing an effective national defense. The equation for international criminal law may also consider foreign policy elements as well as international law and treaty obligations. The Fifth Amendment to the Constitution provides that "no person shall be ... deprived of life, liberty, or property, without due process of law." Due process includes the opportunity to be heard whenever the government places any of these fundamental liberties at stake. The Constitution contains other explicit rights applicable to various stages of a criminal prosecution. Criminal proceedings provide both the opportunity to contest guilt and to challenge the government's conduct that may have violated the rights of the accused. The system of procedural rules used to conduct a criminal hearing, therefore, serves as a safeguard against violations of constitutional rights that take place outside the courtroom. The Bill of Rights applies to all citizens of the United States and all aliens within the United States. However, the methods of application of constitutional rights, in particular the remedies available to those whose rights might have been violated, may differ depending on the severity of the punitive measure the government seeks to take and the entity deciding the case. The jurisdiction of various entities to try a person accused of a crime could have a profound effect on the procedural rights of the accused. The type of judicial review available also varies and may be crucial to the outcome. International law also contains some basic guarantees of human rights, including rights of criminal defendants and prisoners. Treaties to which the United States is a party are expressly made a part of the law of the land by the Supremacy Clause of the Constitution, and may be codified through implementing legislation. International law is incorporated into U.S. law. The law of war, a subset of international law, applies to cases arising from armed conflicts (i.e., war crimes). It is unclear exactly how the law of war applies to the current hostilities involving non-state terrorists, and the nature of the rights due to accused terrorist/war criminals may depend in part on their status under the Geneva Conventions. The Supreme Court has ruled that Al Qaeda fighters are entitled at least to the baseline protections applicable under Common Article 3 of the Geneva Conventions, which includes protection from the "passing of sentences and the carrying out of executions without previous judgment pronounced by a regularly constituted court, affording all the judicial guarantees which are recognized as indispensable by civilized peoples." The federal judiciary is established by Article III of the Constitution and consists of the Supreme Court and "inferior tribunals" established by Congress. It is a separate and co-equal branch of the federal government, independent of the executive and legislative branches, designed to be insulated from the public passions. Its function is not to make law but to interpret law and decide disputes arising under it. Federal criminal law and procedures are enacted by Congress and housed primarily in title 18 of the U.S. Code. The Supreme Court promulgates procedural rules for criminal trials at the federal district courts, subject to Congress's approval. These rules, namely the Federal Rules of Criminal Procedure (Fed. R. Crim. P.) and the Federal Rules of Evidence (Fed. R. Evid.), incorporate procedural rights that the Constitution and various statutes demand. The chart cites relevant rules or court decisions, but makes no effort to provide an exhaustive list of authorities. The Constitution, in order to provide for the common defense, gives Congress the power to raise, support, and regulate the armed forces, but makes the President Commander-in-Chief of the armed forces. Article III does not give the judiciary any explicit role in the military, and the Supreme Court has taken the view that Congress' power "[t]o Make Rules for the Government and Regulation of the land and naval Forces" is entirely separate from Article III. Therefore, courts-martial are not considered to be Article III courts and are not subject to all of the rules that apply in federal courts. Although military personnel are "persons" to whom the Bill of Rights applies, in the military context it might be said that discipline is as important as liberty as objectives of military justice. Also, the Constitution specifically exempts military members accused of a crime from the Fifth Amendment right to a grand jury indictment, from which the Supreme Court has inferred there is no right to a civil jury in courts-martial. However, in part because of the different standards provided in courts-martial, their jurisdiction is limited to those persons and offenses the military has a legitimate interest in regulating. Courts-martial jurisdiction extends mainly to service members on active duty, prisoners of war, and persons accompanying the armed forces in time of declared war, as well as certain violators of the law of war. Congress regulates the armed forces largely through title 10 of the U.S. Code, which contains as Chapter 47 the Uniform Code of Military Justice (UCMJ) regulating the system of military courts-martial. The Supreme Court has found the procedures Congress set through the UCMJ to provide adequate procedural safeguards to satisfy constitutional requirements and the interest in maintaining a strong national defense. Congress has delegated to the President the authority to make procedural rules for the military justice system. The President created the Rules for Courts-Martial (R.C.M.) and the Military Rules of Evidence (Mil. R. Evid.) pursuant to that delegation. The comparison chart will cite provisions of the UCMJ and the applicable rules, as well as military appellate court opinions as applicable. Defendants are not able to appeal their courts-martial directly to federal courts, but may seek relief in the form of a writ of habeas corpus, although review may be limited. However, Congress has provided for a separate system of reviewing convictions by court-martial, which includes a civilian appellate court. In cases in which the convening authority approves a sentence of death, or, unless the defendant waives review, approves a bad-conduct discharge, a dishonorable discharge, dismissal of an officer, or confinement for one year or more, the Court of Criminal Appeals for the appropriate service must review the case for legal error, factual sufficiency, and appropriateness of the sentence. The Court of Appeals for the Armed Forces (CAAF) exercises appellate jurisdiction over the services' Courts of Criminal Appeals, with respect to issues of law. The CAAF is an Article I court composed of five civilian judges appointed for 15-year terms by the President with the advice and consent of the Senate. Its jurisdiction is established in Article 67 of the UCMJ (10 U.S.C. SS 867), and is discretionary except in death penalty cases. The Constitution empowers the Congress to declare war and "make rules concerning captures on land and water," to define and punish violations of the "Law of Nations," and to make regulations to govern the armed forces. The power of the President to convene military commissions flows from his authority as Commander in Chief of the Armed Forces and his responsibility to execute the laws of the nation. Under the Articles of War and subsequent statute, the President has at least implicit authority to convene military commissions to try offenses against the law of war. There is, therefore, somewhat of a distinction between the authority and objectives behind convening military courts-martial and commissions. Rather than serving the internally directed purpose of maintaining discipline and order of the troops, the military commission is externally directed at the enemy as a means of waging successful war by punishing and deterring offenses against the law of war. Jurisdiction of military commissions is limited to time of war and to trying offenses recognized under the law of war or as designated by statute. While case law suggests that military commissions could try U.S. citizens as enemy belligerents, the Military Order of November 13, 2001 limits their jurisdiction to non-citizens. As non-Article III courts, military commissions are not subject to the same constitutional requirements that are applied in Article III courts. Congress has delegated to the President the authority to set the rules of procedure and evidence for military tribunals, applying "the principles of law and the rules of evidence generally recognized in the trial of criminal cases in the United States district court" insofar as he considers it practicable. The rules "may not be contrary to or inconsistent with the UCMJ" and must be uniform insofar as practicable with courts-martial. The United States first used military commissions to try enemy belligerents accused of war crimes during the occupation of Mexico in 1847, and made heavy use of them in the Civil War. However, prior to the President's Military Order, no military commissions had been convened since the aftermath of World War II. Because of the lack of standards of procedure used by military commissions, it is difficult to draw a meaningful comparison with the other types of tribunals. For a comparison of the Department of Defense rules for military commissions that were struck down in Hamdan to recent legislative proposals, see CRS Report RL31600, The Department of Defense Rules for Military Commissions: Analysis of Procedural Rules and Comparison with Proposed Legislation and the Uniform Code of Military Justice , by [author name scrubbed]. Prior to the twentieth century, war crimes were generally tried, if tried at all, by belligerent States in their own national courts or special military tribunals. After World War I, the Allies appointed a 15-member commission to inquire into the legal liability of those responsible for the war and the numerous breaches of the law of war that it occasioned. It recommended the establishment of an international military tribunal to prosecute those accused of war crimes and crimes against humanity. After Germany refused to comply with the locally unpopular provision of the peace treaty requiring it to turn over accused war criminals to the Allied forces for trial, a compromise was reached in which Germany agreed to prosecute those persons in its national courts. Of 901 cases referred to the German Supreme Court for trial at Leipzig, only 13 were convicted. Because German nationalism appeared to have hindered the earnest prosecution of war criminals, the results were largely seen as a failure. In the aftermath of World War II, the Allies applied lessons learned at Leipzig and formed special international tribunals for the European and Asian theaters. In an agreement concluded in London on August 8, 1945, the United States, France, Great Britain and the Soviet Union together established the International Military Tribunal (IMT) at Nuremberg for the trial of war criminals. The four occupying powers also established Control Council Law No. 10, authorizing military tribunals at the national level to try the less high-profile war crimes and crimes against humanity. The evidentiary rules used at Nuremberg and adopted by the Tokyo tribunals were designed to be non-technical, allowing the expeditious admission of "all evidence [the Tribunal] deems to have probative value." This evidence included hearsay, coerced confessions, and the findings of prior mass trials. It has also been argued that the tribunals violated the principles of legality by establishing ex post facto crimes and dispensing victor's justice. However, while the historical consensus seems to have accepted that the Nuremberg Trials were conducted fairly, some observers argue that the malleability of the rules of procedure and evidence could and did have some unjust results, in particular as they were applied by the national military tribunals. The Tokyo tribunal decisions were subject to criticism by dissenters on the Supreme Court in the Yamashita case. Some argue that procedural safeguards considered sufficient for the World War II tribunals would not likely meet today's standards of justice. The jurisdiction of the Nuremberg Tribunal was based on universally applicable international law regulating armed conflict, and its authority was based on the combined sovereignty of the Allies and Germany's unconditional surrender. The Tribunal rejected the defendants' contention that the tribunal violated fundamental legal principles by trying them for conduct that was not prohibited by criminal law at the time it was committed. The Nuremberg Tribunal also adopted the doctrine of individual responsibility for war crimes, rejecting the idea that state sovereignty could protect those responsible from punishment for their misdeeds. Twenty-four Nazi leaders were indicted and tried as war criminals by the International Military Tribunal (IMT). The indictments contained four counts: (1) crimes against the peace, (2) crimes against humanity, (3) war crimes, and (4) a common plan or conspiracy to commit the aforementioned acts. Nineteen of the defendants were found guilty, three were acquitted, one committed suicide before the sentence, and one was physically and mentally unfit for trial. Sentences ranged from death by hanging (twelve), life imprisonment (three), and imprisonment for ten to twenty years (four). The International Military Tribunal for the Far East (IMTFE) in Tokyo was established by a Special Proclamation of General Douglas MacArthur as the Supreme Commander in the Far East for the Allied Powers. Many provisions of the IMTFE were adapted from the London Agreement. The Tokyo tribunal tried only the most serious crimes, crimes against peace. General MacArthur appointed eleven judges, one from each of the victorious Allied nations who signed the instrument of surrender and one each from India and the Philippines, to sit on the tribunal. General MacArthur also appointed the prosecutor. Of the twenty-five people indicted for crimes against peace, all were convicted, with seven executed, sixteen given life imprisonment, and two others serving lesser terms. Some 300,000 Japanese nationals were tried for conventional war crimes (primarily prisoner abuse) and crimes against humanity in national military tribunals. The U.N. Security Council (UNSC), acting under its Chapter VII authority of the U.N. Charter, established two ad hoc criminal courts, the International Criminal Tribunal for the former Yugoslavia (ICTY) and the International Criminal Tribunal for Rwanda (ICTR). Both tribunals are still operating, and employ virtually identical procedural rules. Their jurisdiction is coexistent with that of national courts, but they also may assert primacy over national courts to prevent trials of the same individuals in more than one forum. Their jurisprudence may provide important precedent for the interpretation of Common Article 3. Based in the Hague, Netherlands, the ICTY has jurisdiction to try crimes conducted within the territory of the former Yugoslavia, including the crime of "ethnic cleansing," whether committed in the context of an international war or a war of non-international character. It tries violations of the Geneva Conventions of 1949, violations of the laws or customs of war, genocide, and crimes against humanity when committed in the context of an armed conflict. It is composed of sixteen permanent independent judges, who are elected by the UN General Assembly from a list of nominations provided by the Security Council. It has an Appeals Chamber consisting of seven judges, five of whom sit on a panel in any given case. The Prosecutor, an independent organ of the court appointed by the UN Security Council on the recommendation of the UN Secretary-General, investigates and prosecutes those responsible for covered offenses. When the Prosecutor finds that sufficient evidence exists to try an individual, he issues an indictment, subject to the approval of a judge from the Trial Chamber. The ICTR, based in Arusha, Tanzania, was established by the UN Security Council in response to genocide and other systematic, widespread, and flagrant violations of humanitarian law applicable in the context of a non-international armed conflict, that is, Common Article 3 of the Geneva Conventions and Additional Protocol II, genocide, and crimes against humanity. Its structure and composition are similar to those of the ICTY. As of June 2006, the ICTR has tried 28 accused, convicting 25 and acquitting three. Twenty-seven defendants are undergoing trial, and another fourteen await trial.

Declaring it necessary to bring to justice those responsible for the terrorist attacks on the United States of September 11, 2001, President Bush signed a Military Order (M.O.) authorizing the trial by military commission of certain non-citizens. The order directs the Secretary of Defense to establish the procedural rules for the operation of the military commissions convened pursuant to the M.O. The Department of Defense prepared regulations providing for procedures of military commissions, but these were invalidated by the Supreme Court in Hamdan v. Rumsfeld. The Bush Administration has proposed legislation to reinstate military commissions for the trials of suspected terrorists. This report provides a brief overview of procedural rules applicable in selected historical and contemporary tribunals for the trials of war crimes suspects. The chart that follows compares selected procedural safeguards employed in criminal trials in federal criminal court with parallel protective measures in military general courts-martial, international military tribunals used after World War II, including the International Military Tribunal (IMT or "Nuremberg Tribunal"), and the International Criminal Courts for the former Yugoslavia (ICTY) and Rwanda (ICTR). For comparison of the Department of Defense rules for military commissions that were struck down in Hamdan to recent legislative proposals, see CRS Report RL31600, The Department of Defense Rules for Military Commissions: Analysis of Procedural Rules and Comparison with Proposed Legislation and the Uniform Code of Military Justice, by [author name scrubbed].

In response to concerns raised by the Director of National Intelligence, Admiral Mike McConnell, that the Foreign Intelligence Surveillance Act (FISA), 50 U.S.C. SSSS 1801 et seq ., required modernization to meet the current intelligence needs of the nation, a number of bills were introduced in the Senate and the House of Representatives. Intense legislative activity with respect to proposed amendments to FISA in both bodies resulted in the enactment of the Protect America Act of 2007, P.L. 110-55 on August 5, 2007. The measure was introduced as S. 1927 by Senator McConnell, for himself and Senator Bond, on August 1, 2007. The bill was considered in the Senate on August 3, in conjunction with S. 2011 , entitled The Protect America Act of 2007, introduced by Senator Levin, for himself and Senator Rockefeller. The Senate agreed by unanimous consent to an amendment to S. 1927 offered by Senator McConnell, for himself and Senator Bond, providing that sections 2, 3, 4, and 5 of the bill would sunset 180 days after its enactment. As amended, S. 1927 passed the Senate the same day. S. 2011 did not receive the requisite 60 votes, and was placed on the Senate calendar under general orders. That evening, the House considered H.R. 3356 , the Improving Foreign Intelligence Surveillance to Defend the Nation and the Constitution Act of 2007, introduced by Representative Reyes for himself, Representative Conyers, Representative Schiff, and Representative Flake. After a motion to suspend the rules and pass H.R. 3356 fell short of the required two-thirds vote of the Members on Friday night, the House took up S. 1927 the following day. At 10:19 p.m. Saturday night, August 4, the House passed S. 1927 . It was signed by the President on August 5, 2007. On January 29, 2008, both the House and the Senate passed H.R. 5104 , a 15-day extension to the sunset for the Protect America Act, to allow further time to consider, pass, and go to conference on proposed legislation to amend FISA, while ensuring that the intelligence community would have the authority it needed in the intervening period. The President signed the measure into law on January 31, 2008, as P.L. 110-182 . On February 13, 2008, the House rejected H.R. 5349 , which would have extended the sunset provision for an additional 21 days. Bills have been introduced in the Senate to extend the sunset from 180 to 210 days ( S. 2541 , S. 2556 , and S. 2615 ), or to extend it to July 1, 2009 ( S. 2557 ). This report discusses the provisions of P.L. 110-55 and their impact on or relationship with the prior provisions of FISA. Sec. 1 of S. 1927 states that the short title of the law is the Protect America Act of 2007. Section 2 of the law contains its first substantive provisions. They are summarized in order below. New Section 105A of FISA, as added by Section 2 of P.L. 110-55 , states: Nothing in the definition of electronic surveillance under section 101(f) shall be construed to encompass surveillance directed at a person reasonably believed to be located outside of the United States. Section 101(f) of FISA, 50 U.S.C. SS 1801(f), sets forth the definition of "electronic surveillance" under the statute. It provides: (f) "Electronic surveillance" means-- (1) the acquisition by an electronic, mechanical, or other surveillance device of the contents of any wire or radio communication sent by or intended to be received by a particular, known United States person who is in the United States, if the contents are acquired by intentionally targeting that United States person, under circumstances in which a person has a reasonable expectation of privacy and a warrant would be required for law enforcement purposes; (2) the acquisition by an electronic, mechanical, or other surveillance device of the contents of any wire communication to or from a person in the United States, without the consent of any party thereto, if such acquisition occurs in the United States, but does not include the acquisition of those communications of computer trespassers that would be permissible under section 2511(2)(i) of Title 18; (3) the intentional acquisition by an electronic, mechanical, or other surveillance device of the contents of any radio communication, under circumstances in which a person has a reasonable expectation of privacy and a warrant would be required for law enforcement purposes, and if both the sender and all intended recipients are located within the United States; or (4) the installation or use of an electronic, mechanical, or other surveillance device in the United States for monitoring to acquire information, other than from a wire or radio communication, under circumstances in which a person has a reasonable expectation of privacy and a warrant would be required for law enforcement purposes. Absent the interpretation required by section 105A, two of the four definitions of "electronic surveillance" under section 101(f) of FISA, by their terms, appear to be broad enough to encompass electronic surveillance directed at a person abroad where the communications involved transcend U.S. borders. Subsections 101(f)(2) and (f)(4) of FISA, on their face, appear to have the potential of reaching electronic surveillance of such communications targeted at a person outside the United States. In addition, it might be argued that the language of subsection 101(f)(4) might encompass the possibility of reaching some foreign to foreign communications in limited circumstances. This would suggest that, under FISA prior to the passage of section 105A of P.L. 110-55 , some interceptions directed at a person abroad covered by the language of these subsections might have been regarded by the FISC as requiring court authorization. In pertinent part, "electronic surveillance," as defined by subsection 101(f)(2), covers acquisition of the contents of wire communications to or from a person in the United States where the acquisition occurs within the United States and no party to the communication has consented to the interception. Unlike subsection 101(f)(1), there is no express requirement that the person in the United States be known, that he or she be United States person, or that he or she be intentionally targeted by the electronic surveillance. To the extent that an electronic surveillance under subsection 101(f)(2) intercepts communications between persons in the United States, it would not be impacted by section 105A of FISA, as added by P.L. 110-55 , nor would section 105A affect electronic surveillance targeted at a person within the United States. However, to the extent that the language in subsection 101(f)(2) might encompass interception of communications between a person in the United States and one or more parties outside the United States, where the surveillance is targeted at a person outside the United States, section 105A would seem to restrict the previous reach of the definition of "electronic surveillance" in section 101(f)(2). Subsection 101(f)(4) defines "electronic surveillance" under FISA to include "the installation or use of an electronic, mechanical, or other surveillance device in the United States for monitoring to acquire information, other than from a wire or radio communication, under circumstances in which a person has a reasonable expectation of privacy and a warrant would be required for law enforcement purposes." This subsection does not explicitly address the location of the parties to the communication or the location of the acquisition of the information involved. Thus, by its terms, it could conceivably be interpreted to cover some communications between parties in the United States, between a party in the United States and a party outside the United States, or between parties abroad, if the other requirements of the subsection were satisfied. The restrictions in this section are two-fold: the information must be acquired other than from a wire or radio communication; and the circumstances of the acquisition must be such that a person would have a reasonable expectation of privacy and a warrant would be required for law enforcement purposes. To the extent that "electronic surveillance" under subsection 101(f)(4) of FISA could have been or has been directed at a person or persons abroad, prior to the enactment of P.L. 110-55 , new section 105A may also have the effect of limiting the scope of this subsection of the definition of "electronic surveillance" as it was previously interpreted. New section 105B(a) of FISA permits the Attorney General and the Director of National Intelligence, for periods of up to one year, to authorize acquisition of foreign intelligence information concerning persons reasonably believed to be outside the United States, if the Attorney General and the DNI determine, based on the information provided to them, that five criteria have been met. Under these criteria, the Attorney General and the DNI must certify that: (1) there are reasonable procedures in place for determining that the acquisition of foreign intelligence information under this section concerns persons reasonably believed to be located outside the United States, and such procedures will be subject to review of the Court pursuant to section 105C of this Act; (2) the acquisition does not constitute electronic surveillance; (3) the acquisition involves obtaining the foreign intelligence information from or with the assistance of a communications service provider, custodian, or other person (including any officer, employee, agent, or other specified person of such service provider, custodian, or other person) who has access to communications, either as they are transmitted or while they are stored, or equipment that is being or may be used to transmit or store such communications; (4) a significant purpose of the acquisition is to obtain foreign intelligence information; and (5) the minimization procedures to be used with respect to such acquisition activity meet the definition of minimization procedures under section 101(h). Except in circumstances where immediate government action is required and there is not sufficient time to prepare a certification, the determination by the Attorney General and the DNI that these criteria have been satisfied must be in the form of a certification, under oath, supported by affidavit of appropriate officials in the national security field appointed by the President, by and with the advice and consent of the Senate, or the Head of any agency of the Intelligence Community. Where imminent government action is required, the determination must be reduced to a certification as soon as possible within 72 hours after the determination is made. The certification need not identify specific facilities, places, premises, or property at which the acquisition will be directed. A copy of a certification made under section 105B(a) must be transmitted under seal to the FISC as soon as practicable, there to be maintained under security measures established by the Chief Justice of the United States and the Attorney General, in consultation with the DNI. The copy of the certification must remain sealed unless needed to determine the legality of the acquisition involved. Where a certification has been prepared, an acquisition under section 105B of FISA must be conducted in accordance with that certification and minimization procedures adopted by the Attorney General. If a certification has not yet been prepared because of inadequate time, the acquisition must comply with the oral instructions of the DNI and the Attorney General and the applicable minimization procedures. Section 105B(d) requires the DNI and the Attorney General must report their assessments of compliance with "such procedures" to the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence under section 108(a) of FISA, 50 U.S.C. SS 1808(a). In connection with an acquisition authorized under section 105B, the DNI and the Attorney General may issue a directive to a person to immediately provide the government with all information , facilities, and assistance needed to accomplish the acquisition in a manner which will protect the secrecy of the acquisition and minimize interference with the services provided by that person to the target of the acquisition. The government must compensate the person furnishing such aid at the prevailing rate. Any records that person wishes to keep relating to the acquisition or the aid provided must be maintained under security procedures approved by the DNI and the Attorney General. P.L. 110-55 bars any cause of action in any court against any person for providing information, facilities or assistance in accordance with a directive under this section. If a person receiving such a directive fails to comply therewith, the FISC, at the Attorney General's request, shall issue an order to compel such compliance if the court finds that the directive was issued in accordance with section 105B(e) and is otherwise lawful. A person receiving a directive under section 105B(e) may challenge its legality by filing a petition before the petition review pool of the FISC. Under subsection 105B(h)(1)(B) as written, the presiding judge of the Foreign Intelligence Surveillance Court of Review (Court of Review) shall assign a petition filed with the petition review pool to one of the FISC judges in the pool. The assigned judge must conduct an initial review of the directive within 48 hours after the assignment. If he or she determines that the petition is frivolous, the petition is immediately denied and the directive or that portion of the directive that is the subject of the petition is affirmed. If the judge does not find the petition frivolous, he or she has 72 hours in which to consider the petition and provide a written statement for the record of the reasons for any determination made. A petition to modify or set aside a directive may only be granted if the judge finds that the directive does not meet the requirements of section 105B or is otherwise unlawful. Otherwise the judge must immediately affirm the directive and order its recipient to comply with it. A directive not explicitly modified or set aside remains in full effect. Within seven days of the assigned judge's decision, the government or a recipient of the directive may petition the Foreign Intelligence Surveillance Court of Review for review of that decision. The Court of Review must provide a written statement on the record of the reasons for its decision. The government or any recipient of the directive may seek review of the decision of the Court of Review by petition for a writ of certiorari to the U.S. Supreme Court. All judicial proceedings under this section are to be concluded as expeditiously as possible. All petitions under this section are filed under seal. Upon request of the government in any proceeding under this section, the court shall review ex parte and in camera any government submission or portion of a submission which may contain classified information. The record of all proceedings, including petitions filed, orders granted, and statements of reasons for decision, must be maintained under security measures established by the Chief Justice of the United States in consultation with the Attorney General and the DNI. A directive made or an order granted under this section must be retained for at least ten years. Section 105B is a new section added to title I of FISA, 50 U.S.C. SSSS 1801 et seq . It differs from the other provisions of title I of FISA in that it does not deal with electronic surveillance, but rather with acquisitions that do not constitute electronic surveillance. Because section 105B does not specify where such acquisitions may occur or from whom, it appears that such foreign intelligence information concerning persons reasonably believed to be outside the United States may be acquired, at least in part, from persons, including U.S. persons, who are located within the United States. Similar to electronic surveillance under section 102 of FISA, 50 U.S.C. SS 1802, which may be authorized for up to one year by the President, through the Attorney General, without a court order if the Attorney General certifies in writing under oath that certain requirements are satisfied, acquisitions under section 105B of FISA, may be authorized by the DNI and the Attorney General without a court order if they certify in writing under oath that certain criteria are met. However, section 105B has no parallel to section 102(a)(1)(B)'s requirement that "there is no substantial likelihood that the surveillance will acquire the contents of any communication to which a United States person is a party." Similar to section 105B(d)'s reporting requirements, section 102(a)(2) requires electronic surveillance under that section to be carried out in accordance with the Attorney General's certification and applicable minimization requirements, and directs the Attorney General to assess compliance with "such procedures" and report his assessments to the House and Senate intelligence committees under the provisions of section 108(a) of FISA. Section 102(a)(4), which permits the Attorney General to direct a specified communication common carrier to provide information, facilities, or technical assistance to the government needed to carry out the electronic surveillance involved and to compensate that communication common carrier at the prevailing rate for its aid, is structurally similar to section 105B(e) and (f). However, subsections 105B(e) and (g)-(i) permit the Attorney General and the DNI to direct "a person," rather than a "specified communication common carrier," to "immediately" furnish such aid; provide authority for the Attorney General to seek the aid of the FISC to compel compliance with such a directive; give the recipient of the directive a right to challenge the legality of the directive before the petition review pool of the same court; and permit both the government and the recipient of the directive to appeal that court's decision. The authority to challenge the legality of such a directive and to appeal the decision appears modeled, to some degree, after the process set forth in section 501(f) of FISA, 50 U.S.C. SS 1861(f), dealing with challenges to the legality of production and nondisclosure orders. Unlike electronic surveillance pursuant to a court order sought under section 104 of FISA, 50 U.S.C. SS 1804, and authorized under section 105 of FISA, 50 U.S.C. SS 1805, where the government provides the FISC with specific categories of substantive information about the electronic surveillance involved upon which the court can base its determinations; the government submits certain procedures for review to the FISC, but does not provide the court with substantive information about the acquisitions themselves. Section 3 of the act creates a new section 105C of FISA, creating a review process for the procedures under which the government determines that acquisitions of foreign intelligence information from persons reasonably believed to be located outside the United States do not constitute electronic surveillance. Subsection 105C(a) requires the Attorney General, within 120 days of enactment of the act, to submit to the FISC the procedures by which the government determines that acquisitions conducted pursuant to section 105B of the act do not constitute electronic surveillance. The procedures are to be updated and submitted to the FISC annually. Within 180 days after enactment, the FISC must assess whether the government's determination under section 105B(1) of FISA that the procedures are "reasonably designed to ensure that acquisitions conducted pursuant to section 105B do not constitute electronic surveillance" is clearly erroneous. If the FISC deems the government's determination not clearly erroneous, the court must enter an order approving the continued use of the procedures. On the other hand, if the government's determination is found to be clearly erroneous, new procedures must be submitted with 30 days or any acquisitions under section 105B implicated by the FISC order must cease. Any order issued by the FISC under subsection 105C(c) may be appealed by the government to the Foreign Intelligence Surveillance Court of Review. If the Court of Review finds the FISC order was properly entered, the government may seek U.S. Supreme Court review through a petition for a writ of certiorari. Any acquisitions affected by the FISC order at issue may continue throughout the review process. The section 105C procedure review process is new and does not appear to have a parallel in the other provisions of FISA. The Terrorist Surveillance Program has been characterized as involving "intercepts of contents of communications where one . . . party to the communication is outside the United States" and the government has "a reasonable basis to conclude that one party to the communication is a member of al Qaeda, affiliated with al Qaeda, or a member of an organization affiliated with al Qaeda, or working in support of al Qaeda." In a letter from the Attorney General to Senator Leahy and Senator Specter on January 17, 2007, the Attorney General indicated that, based upon classified orders issued by a judge of the Foreign Intelligence Surveillance Court (FISC), electronic surveillances previously carried out under the Terrorist Surveillance Program would thereafter be under the court's supervision. His letter stated, in part: I am writing to inform you that on January 10, 2007, a Judge of the Foreign Intelligence Surveillance Court issued orders authorizing the Government to target for collection international communications into or out of the United States where there is probable cause to believe that one of the communicants is a member or agent of al Qaeda or an associated terrorist organization. As a result of these orders, any electronic surveillance that was occurring as part of the Terrorist Surveillance Program will now be conducted subject to the approval of the Foreign Intelligence Surveillance Court.... A question may arise as to whether new section 105A's interpretation of the definition of "electronic surveillance" under FISA, might impact the FISC's jurisdiction over some or all of the interceptions to which the Attorney General referred. Under section 103(a) of FISA, 50 U.S.C. SS 1803(a): The Chief Justice of the United States shall publicly designate 11 district court judges from seven of the United States judicial circuits of whom no fewer than 3 shall reside within 20 miles of the District of Columbia who shall constitute a court which shall have jurisdiction to hear applications for and grant orders approving electronic surveillance anywhere within the United States under the procedures set forth in this chapter, except that no judge designated under this subsection shall hear the same application for electronic surveillance under this chapter which has been denied previously by another judge designated under this subsection.... Section 102(b) of FISA, 50 U.S.C. SS 1802(b), provides that: Applications for a court order under [title I of FISA, 50 U.S.C. SSSS 1801 et seq .] are authorized if the President has, by written authorization, empowered the Attorney General to approve applications to the court having jurisdiction under section 1803 of this title, and a judge to whom an application is made may, notwithstanding any other law, grant an order, in conformity with section 1805 of this title, approving electronic surveillance of a foreign power or an agent of a foreign power for the purpose of obtaining foreign intelligence information, except that the court shall not have jurisdiction to grant any order approving electronic surveillance directed solely as described in paragraph (1)(A) of subsection (a) of this section unless such surveillance may involve the acquisition of communications of any United States person. The answer to the jurisdictional question raised above would seem to depend on whether those interceptions were directed at the communications of a person reasonably believed to be located outside the United States. If so, then, by virtue of section 105A, such interceptions would not be construed to fall within the definition of "electronic surveillance" under FISA, and therefore a review of the underpinnings of such interceptions would not be within the FISC's jurisdiction in connection with an application to authorize electronic surveillance. If treated instead as acquisitions under new section 105B of FISA, then the FISC would seem to be limited to reviewing, under a clearly erroneous standard, the general procedures under which the Director of National Intelligence (DNI) and the Attorney General would make determinations that acquisitions did not constitute electronic surveillance; and judges of the FISC petition review pool would have jurisdiction to consider petitions challenging the legality of directives to persons to furnish aid to the government to accomplish those acquisitions. Implicit in the previous discussion is the question what impact, if any, any possible narrowing of the interpretation of the definition of "electronic surveillance" under FISA might have upon the scope of "acquisitions" under new section 105B of FISA. In other words, if an interception of communications directed toward a person reasonably believed to be located outside the United States does not constitute "electronic surveillance" for purposes of FISA, regardless of where the other parties to the communication may be located or whether some or all of those other parties may be U.S. persons, could some or all such interceptions be deemed "acquisitions" under the provisions of section 105B? For this to be the case, it would appear that the interception would have to be authorized by the DNI and the Attorney General under section 105B of FISA to acquire foreign intelligence information concerning persons reasonably believed to be outside the United States, and would have to satisfy the five criteria set forth in section 105B(a), including the use of minimization procedures. If these requirements are met, then it appears that some communications to which U.S. persons located within the United States might be parties could be intercepted for periods of up to one year without a court order under section 105B. This contrasts markedly with the detailed information to be provided by the government to the FISC in an application for a court order for electronic surveillance under section 104 of FISA, 50 U.S.C. SS 1804, and the level of FISC review provided for such applications. To the extent that new section 105A circumscribes the previous interpretation of "electronic surveillance" as defined under section 101(f) of FISA, 50 U.S.C. SS 1801(f), it could be argued that this might significantly diminish the degree of judicial review to which such interceptions might have heretofore been entitled. On the other hand, if the interpretation of the definition of "electronic surveillance" contemplated in new section 105A of FISA is consistent with prior practice, then this concern with respect to section 105A's impact would appear to be eliminated. A somewhat closer parallel might be drawn between the statutory structure for acquisitions contemplated in section 105B and that for electronic surveillance under section 102 of FISA, 50 U.S.C. SS 1802. The latter section permits the President, through the Attorney General, to authorize electronic surveillance for up to one year without a court order, if the Attorney General certifies in writing under oath that the electronic surveillance is solely directed at the acquisition of the contents of communications transmitted by means of communications used exclusively between or among foreign powers, as defined in section 1801(a)(1), (2), or (3) of this title; or the acquisition of technical intelligence, other than the spoken communications of individuals, from property or premises under the open and exclusive control of such a foreign power. In addition, the Attorney General must certify that there is no substantial likelihood that the surveillance will acquire the contents of any communication to which a United States person is a party; and that the proposed minimization procedures with respect to such surveillance meet the definition of minimization procedures under section 1801(h) of this title; and he must comply with reporting requirements regarding those minimization procedures. Subsection 102(b) of FISA denies the FISC jurisdiction to grant any order approving electronic surveillance directed solely at the acquisition of communications used exclusively between or among such foreign powers or the acquisition of such technical intelligence from property or premises under the exclusive and open control of such foreign powers, unless such surveillance may involve the acquisition of communications of any United States person. Section 105B provides the FISC no similar jurisdiction if an acquisition involves the communications of a United States person. Again, if the interpretation of the definition of "electronic surveillance" contemplated in new section 105A of FISA is consistent with prior practice, then this concern regarding section 105A's effect would appear to be eliminated. To the extent that any intentional interceptions of communications which were previously deemed to be covered by the definition of "electronic surveillance" under FISA are now excluded from that definition, another question which may arise is whether any of those interceptions may now be found to fall within the general prohibition against intentional interception of wire, oral, or electronic communications under Title III of the Omnibus Crime Control and Safe Streets Act of 1968, as amended, 18 U.S.C. SS 2511. Under 18 U.S.C. SS 2511(2)(f), "electronic surveillance," as defined in section 101 of the Foreign Intelligence Surveillance Act, is an exception to this general prohibition. If such interceptions were deemed to violate 18 U.S.C. SS 2511, then the intentional use or disclosure of the contents of such communications, knowing that the information was obtained through the interception of a wire, oral, or electronic communication in violation of 18 U.S.C. SS 2511 would also be prohibited under that section. Section 4 of P.L. 110-55 requires the Attorney General to inform the Senate Select Committee on Intelligence, the House Permanent Select Committee on Intelligence, the Senate Judiciary Committee and the House Judiciary Committee semi-annually concerning acquisitions "under this section" during the previous six-month period. Each report is to include descriptions of any incidents of non-compliance with a directive issued by the DNI and the Attorney General under section 105B, including noncompliance by an element of the Intelligence Community with guidelines or procedures for determining that "the acquisition of foreign intelligence authorized by the Attorney General and the [DNI] concerns persons reasonably to be outside the United States," and incidents of noncompliance by a specified person to whom a directive is issued under section 105B. The report is also required to include the number of certifications and directives issued during the reporting period. Section 5(a)(1) and (a)(2) make technical amendments to section 103(e)(1) and (2) of FISA, 50 U.S.C. SS 1803(e)(1) and (2), to reflect the jurisdiction of the FISC petition review pool over petitions under section 105B(h) of FISA, dealing with challenges to the legality of directives issued under section 105B(e) of FISA to a person by the Attorney General and the DNI, and over petitions under section 501(f) of FISA, 50 U.S.C. SS 1861, dealing with challenges to production orders or nondisclosure orders issued by the FISC under section 501(c) of FISA, 50 U.S.C. SS 1861(c). Section 5(b) makes conforming amendments to the table of contents of the first "section" of FISA, 50 U.S.C. SS 1801 et seq ., to reflect the additions of new sections 105A, 105B, and 105C of FISA. Under Section 6(a) of P.L. 110-55 , the amendments to FISA made in the act are to take effect immediately after its enactment except as otherwise provided. Section 6(b) of P.L. 110-55 provides that any order issued under FISA in effect on the date of enactment of P.L. 110-55 (August 5, 2007) shall remain in effect until the date of expiration of the order, and, at the request of the applicant for the order, the FISC shall reauthorize the order as long as the facts and circumstances continue to justify its issuance under FISA as in effect the day before the applicable effective date of P.L. 110-55 . This appears to refer to orders and applications for orders under FISA authorizing electronic surveillance, physical searches, pen registers or trap and trace devices, or production of tangible things and related nondisclosure orders. Section 6(b) provides further that the government may also file new applications and the FISC shall enter orders granting such applications pursuant to FISA, as long as the application meets the requirements set forth in FISA as in effect on the day before the applicable effective date of P.L. 110-55 . This seems to indicate that pre-existing authorities under FISA remain available in the wake of P.L. 110-55 's enactment. At the applicant's request, the FISC shall extinguish any extant authorizations to conduct electronic surveillance or physical searches pursuant to FISA. Any surveillance conducted pursuant to an order entered under subsection 6(b) of P.L. 110-55 is to be subject to the provisions of FISA as in effect before the effective date of P.L. 110-55 . Under Section 6(c) of P.L. 110-55 , sections 2, 3, 4, and 5 of that act were to sunset 180 days after the date of enactment of the act, except as provided in section 6(d). Under section 6(d), any authorizations for acquisition of foreign intelligence information or directives issued pursuant to those authorizations issued under section 105B shall remain in effect until their expiration. Section 6(d) also provides that such acquisitions shall be governed by the applicable amendments made to FISA by P.L. 110-55 , and shall not be deemed to constitute electronic surveillance as that term is defined in section 101(f) of FISA. On January 29, 2008, both the House and the Senate passed H.R. 5104 , a 15-day extension to the sunset for the Protect America Act, to allow further time to consider, pass, and go to conference on proposed legislation to amend FISA, while ensuring that the intelligence community would have the authority it needed in the intervening period. It was signed into law on January 31, 2008, as P.L. 110-182 . On February 13, 2008, the House rejected H.R. 5349 , which would have extended the sunset provision for an additional 21 days. Bills have been introduced in the Senate to extend the sunset from 180 to 210 days ( S. 2541 , S. 2556 , and S. 2615 ), or to extend it to July 1, 2009 ( S. 2557 ). The President has indicated that he will not agree to a further extension of the sunset provision.

On August 5, 2007, P.L. 110-55, the Protect America Act of 2007, was signed into law by President Bush, after having been passed by the Senate on August 3 and the House of Representatives on August 4. The measure, introduced by Senator McConnell as S. 1927 on August 1, makes a number of additions and modifications to the Foreign Intelligence Surveillance Act of 1978 (FISA), as amended, 50 U.S.C. SSSS 1801 et seq., and adds additional reporting requirements. As originally passed, the law was to sunset in 180 days, on February 1, 2008. On January 29, 2008, both the House and the Senate passed H.R. 5104, a 15-day extension to the sunset for the Protect America Act, to allow further time to consider, pass, and go to conference on proposed legislation to amend FISA, while ensuring that the intelligence community would have the authority it needed in the intervening period. Signed into law on January 31, it became P.L. 110-182. On February 13, 2008, the House rejected H.R. 5349, which would have extended the sunset provision an additional 21 days. Bills have been introduced in the Senate to extend the sunset from 180 to 210 days (S. 2541, S. 2556, and S. 2615) or to extend it to July 1, 2009 (S. 2557). The Foreign Intelligence Surveillance Act of 1978 was enacted in response both to the Committee to Study Government Operations with Respect to Intelligence Activities (Church Committee) revelations with regard to past abuses of electronic surveillance for national security purposes and to the somewhat uncertain state of the law on the subject. In creating a statutory framework for the use of electronic surveillance to obtain foreign intelligence information, the Congress sought to strike a balance between national security interests and civil liberties. Critical to an understanding of the FISA structure are its definitions of terms such as "electronic surveillance" and "foreign intelligence information." P.L. 110-55 limits the construction of the term "electronic surveillance" so that it does not cover surveillance directed at a person reasonably believed to be located outside the United States. It also creates a mechanism for acquisition, without a court order under a certification by the Director of National Intelligence (DNI) and the Attorney General, of foreign intelligence information concerning a person reasonably believed to be outside the United States. The Protect America Act provides for review by the Foreign Intelligence Surveillance Court (FISC) of the procedures by which the DNI and the Attorney General determine that such acquisitions do not constitute electronic surveillance. In addition, P.L. 110-55 authorizes the Attorney General and the DNI to direct a person with access to the communications involved to furnish aid to the government to facilitate such acquisitions, and provides a means by which the legality of such a directive may be reviewed by the FISC petition review pool. A decision by a judge of the FISC petition review pool may be appealed to the Foreign Intelligence Surveillance Court of Review, and review by the U.S. Supreme Court may be sought by petition for writ of certiorari. This report describes the provisions of P.L. 110-55, discusses its possible impact on and parallels to existing law, summarizes the legislative activity with respect to S. 1927, H.R. 3356, and S. 2011, and touches on recent legislative developments. It will be updated as needed.

The German automotive manufacturer Volkswagen Automotive Group (VW) has admitted to installing a software algorithm in several of its diesel-fueled vehicle engines that acts as a "defeat device": the software detects wh en the vehicle is undergoing official compliance testing and activates certain pollution control devices to reduce tailpipe emissions. During normal driving situations, however, the control devices are turned off, resulting in higher emissions of nitrogen oxides (NO x ) and other air pollutants than claimed by the company. Such software could allow higher on-road performance and fuel economy than otherwise attainable with fully active emissions systems. Federal and California regulators examined the use of this software--reportedly installed in 11 million vehicles worldwide from model years (MY) 2009 to 2016--and announced a $14.7 billion partial settlement in June 2016. The European Union (EU) is also examining the use of the software. On September 18, 2015, the U.S. Environmental Protection Agency (EPA) issued a notice of violation (NOV) to VW, contending that Volkswagen and Audi vehicles with 2.0 liter diesel engines (MY2009-MY2015) include software that circumvents EPA emissions standards for nitrogen oxide (NO x ) emissions. EPA stated that when the emissions equipment is disabled, NO x emissions are up to 40 times greater than the standard. The California Air Resources Board (CARB) also initiated an investigation into VW's use of this "defeat device." These allegations cover roughly 499,000 diesel passenger cars sold in the United States. Following the September 18 notice to VW, EPA initiated testing of all U.S. 2015 and 2016 light-duty diesel models to detect potential defeat devices. On November 2, 2015, EPA issued a second NOV alleging that VW installed defeat devices in light-duty diesel vehicles equipped with 3.0 liter engines for MY2014-MY2016, resulting in NO x emissions nine times the EPA standard. This notice affects 85,000 vehicles sold since MY2009. The U.S. Department of Justice (DOJ) filed a civil complaint on behalf of EPA in federal court on January 4, 2016. DOJ alleged that nearly 600,000 diesel vehicles had illegal defeat devices installed, thereby impairing emissions controls and causing harmful air pollution in excess of EPA standards. The complaint also alleged that VW violated the Clean Air Act (CAA) by selling vehicles that are designed differently from what it stated in applications for certification to EPA and CARB. DOJ sought injunctive relief and the assessment of unspecified civil penalties; other legal remedies may be pursued as well, such as criminal charges. Parties have settled regarding some of these legal remedies, while others remain unresolved. EPA and CARB were alerted to the emissions violations by researchers at West Virginia University (WVU) working under a contract with the International Council on Clean Transportation (ICCT), a nonprofit environmental research organization. As part of a study of on-road emissions from diesel vehicles, the WVU researchers found emissions levels for some vehicles far exceeded U.S. certification standards. The study was part of a larger investigation by ICCT motivated by reports that some European-made diesel vehicles had passed emissions tests but had much higher real-world NO x emissions. (EU emissions standards apply only at the time a vehicle is produced; surveillance testing, mandatory emissions system warranties, and other features of U.S. rules are not incorporated in EU regulations.) According to the EPA notice, VW initially indicated that the excess emissions resulted from a software problem that could be addressed by a voluntary recall. Ultimately, EPA found that software installed in the vehicles' computers sensed when the vehicles were being tested and activated a lower-emissions mode. Thus, nonstandard testing was necessary to reveal VW's actions. Such software could circumvent the "diesel dilemma," discussed below, and allow higher on-road performance and fuel economy than otherwise attainable with fully active emissions systems. WVU's testing indicated a BMW diesel vehicle was able to meet emissions targets. Thus, emissions compliance does not appear to be one of technical feasibility. It should also be noted that while ICCT has found other diesel vehicles that exceed European or U.S. NO x standards in real-world use, VW is so far the only automobile manufacturer accused of using defeat devices. Diesel engines are internal combustion engines that use heat generated by fuel compression to ignite the diesel fuel. Gasoline-powered engines use spark plugs and other components to ignite the fuel, fire the pistons, and drive the car. Otherwise, gasoline and diesel engines are similar. Diesel fuel--which is of a different chemical composition and contains more energy per unit of volume than gasoline--combined with compression ignition is potentially a more energy-efficient process and in general delivers more power than gasoline. The 2015 EPA Fuel Economy Guide notes that Diesel engines are inherently more energy-efficient, and diesel fuel contains roughly 10%-15% more energy per gallon than gasoline. In addition, new advances in diesel engine technology have improved performance, reduced engine noise and fuel odor, and decreased emissions of harmful air pollutants. Ultra-low sulfur diesel fuels also help reduce emissions from these vehicles. Diesel engines generally last longer than gasoline engines and retain a higher resale value. However, diesel engines are more expensive to manufacture than gasoline engines and retail for more. They generally emit greater quantities of NO x and particulate matter (PM) that require pollution control devices not found on gasoline vehicles. Diesel engine technology has changed in recent years as automakers have sought to find new ways to raise fuel economy and reduce emissions so they can meet new federal (and EU) greenhouse gas standards. Providing direct injection of fuel into the engine combustion chamber and turbocharging the air used to burn the fuel are two ways in which the goals of higher fuel efficiency and lower emissions can be met. VW's technology is called Turbocharged Direct Injection (TDI). Similar technology is found on other diesel-fueled passenger cars. The motor vehicles that had defeat devices installed were all diesels manufactured in Europe or the United States. It has been estimated that about 584,000 diesel passenger cars sold in the United States since MY2009 are equipped with a defeat device. See Table 1 for affected vehicles. EPA did not grant certificates of conformity for VW's MY2016 diesel vehicles, thus halting sales of these vehicles in the United States. Volkswagen is a German company established in 1933, with manufacturing operations around the world. In 2015, VW was the world's second-largest automaker after Toyota. In the United States, VW manufactures passenger vehicles at its Chattanooga, TN, plant, which opened in 2011. This is VW's second U.S. manufacturing facility: a Pennsylvania plant operated from 1978 until 1987, when it was closed because of decreasing sales. The Passat, reconfigured from the original European model as a larger vehicle for the U.S. market, has been manufactured with both gasoline and diesel engines at the Tennessee plant. The resumption of U.S. manufacturing is part of VW's strategy to significantly increase U.S. sales. In 2014, the VW Group sold nearly 600,000 vehicles in the United States, of which 48% were produced in the United States and Mexico. VW Group's total U.S. market share in 2014 was almost 4%. Figure 1 shows how the total U.S. sales of VW's light vehicles (gasoline and diesel-powered), including the Volkswagen, Audi, Bentley, Porsche, and Lamborghini brands, compared with those of other automakers in 2014. Diesel-fueled vehicles manufactured by other automotive companies have not been implicated, but EPA has announced it will expand its testing protocols to sample these vehicles to assess their compliance with CAA standards. In the civil complaint filed on January 4, 2016, DOJ alleged that VW violated several provisions of CAA Section 203 (42 U.S.C. SS7522). In general, the CAA outlines a schedule by which EPA is to establish and update emissions standards for pollutants that affect public health or welfare. Under Section 202, as amended, the EPA Administrator is required to set emissions standards for new motor vehicles: The Administrator shall by regulation prescribe (and from time to time revise) in accordance with the provisions of this section, standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare. Section 203, as amended, specifies the prohibited acts with respect to the emissions standards. DOJ alleged that VW violated Section 203(a)(1) regarding the sale of vehicles not covered by a certificate of conformity; Section 203(a)(3)(B) regarding the installation of defeat devices; and Section 203(a)(3)(A) regarding tampering with emission control devices. Emissions standards for new motor vehicles have been strengthened numerous times since the first federal rulemaking took effect in 1968. The most recent revisions, referred to as the "Tier 2" standards, were promulgated in February 2000. Tier 2 required vehicle manufacturers to reduce tailpipe emissions of several common pollutants, including carbon monoxide (CO), formaldehyde (HCHO), NO x , non-methane organic gases (NMOG, a class of volatile organic compounds (VOCs)), and particulate matter (PM). Relative to the prior Tier 1 standards, the fleet-average standard for NO x required vehicle manufacturers to reduce overall tailpipe emissions by 88% to 95% (based upon the vehicle type). Emissions from diesel fuel combustion contribute to air pollution, including nitrogen dioxide (NO 2 ), ground-level ozone (O 3 ), and fine particulate matter (PM 2.5 ). Exposure to these pollutants can lead to serious health effects, including increased asthma attacks and other respiratory illnesses. Exposure to O 3 and PM 2.5 has also been tied to premature death stemming from respiratory and cardiovascular failure. Children, the elderly, and people with respiratory diseases may be especially vulnerable to these pollutants. Diesel engines offer the possibility of combining very high efficiency with a high energy content fuel, resulting in greater fuel economy and lower carbon dioxide emissions. The main problem areas for diesel-fueled engines--compared to gasoline-powered engines--are emissions of NO x and PM. Engine design often involves a tradeoff, accepting greater emissions of one of these two pollutants in return for tighter control of the other. This trade-off is often referred to as the "diesel dilemma." As summarized by researchers at the University of California--Davis, "the challenge for engine manufacturers is to reduce both NO x and particulates, and retain diesel's superior fuel efficiency." Under earlier U.S. standards, diesel vehicles were permitted higher NO x emissions, as is the case in the EU and elsewhere. However, in 1999, under EPA's "Tier 1" standards, the agency adopted a "fuel neutral" approach to emissions controls, requiring vehicles to attain the same standards regardless of the fuel they used. At the time, there was controversy over the ability of diesel cars to meet the new standards. It is theoretically possible to run a diesel engine with near-zero emissions of both NO x and PM, but in practice cost-effective reductions are achieved through a combination of efficient combustion processes and tailpipe emissions controls. The specific processes depend on the engine design, and involve lubrication, fuel delivery and injection systems, turbochargers, and various "aftertreatment" technologies. One potential NO x control technology is selective catalytic reduction (SCR), which adds urea and water to the exhaust to break down NO x into nitrogen and carbon dioxide. Applying this solution on diesel vehicles sold in the United States requires additional equipment, including a urea tank, pump, and delivery system. Other parts of the vehicle would have to be designed to leave room for the SCR components. Another potential control technology is a nitrogen oxide trap. Such a trap, or "adsorber," chemically binds nitrogen oxides during lean engine operation. After the adsorber is saturated to capacity, the system is regenerated with an injection of diesel fuel, and the released NO x is catalytically reduced to nitrogen. This solution requires the use of additional fuel that is not dedicated to powering the engine, and thus, the vehicle's performance and fuel economy are compromised. It is alleged that VW used the defeat devices to circumvent adsorber technology in the noncompliant vehicles under investigation. To receive a "certificate of conformity" (COC) and sell vehicles in the United States, automakers must certify that their vehicles will meet emissions standards. In addition to initial testing and certification, automakers must test vehicles after production through the In-Use Verification Program (IUVP). According to EPA, if the IUVP reveals problems, "EPA would work with the manufacturer to fix them, either through voluntary manufacturer action or, if necessary, through an ordered emissions recall." In addition to the manufacturer-controlled IUVP, EPA also conducts limited "surveillance testing" at its laboratory in Ann Arbor, MI. EPA selects vehicles for such testing from IUVP data, EPA certification data, consumer complaints, and random selection. Each year EPA tests a few dozen vehicles. In the wake of the VW allegations, EPA issued guidance to manufacturers on September 25, 2015, that it may require additional testing to investigate potential defeat devices. VW has not stated why the defeat devices were installed. Experts in automotive technology have said that disengaging the pollution controls on a diesel-fueled car can yield better performance, including increased torque and acceleration. Further, several types of emissions control technologies require fuel to run; thus, disengaging them would return better fuel economy for the vehicle. In the case of VW, such modifications may have been intended to allow vehicles designed for the European Union market to meet more stringent U.S. NO x regulations, avoiding additional investment for the comparatively small U.S. diesel vehicle market. Consumer Reports concluded that VW may have used the defeat devices to increase fuel economy and vehicle performance. It tested MY2011 and MY2015 VW TDI diesel vehicles with and without the defeat device engaged and found a "noticeable decline in fuel economy for both models" when the defeat device was not engaged. On January 4, 2016, DOJ filed a civil complaint against VW in the U.S. District Court for the Eastern District of Michigan based on the allegations regarding installation of defeat devices in 2.0L diesel vehicles, as described in this report. The complaint made four claims for relief: that Volkswagen sold, offered for sale, introduced into commerce, delivered for introduction into commerce, or imported vehicles that did not conform in all material respects with the specifications in the COCs purported to cover them, in violation of Section 203(a)(1) of the CAA; that Volkswagen manufactured, sold, offered for sale, or installed parts or components in certain vehicles intended for use with motor vehicles where a principal effect of the part or component is to bypass, defeat, or render inoperative a device or element of design installed in compliance with CAA regulations, in violation of Section 203(a)(3)(B) of the CAA; that certain auxiliary emission control devices installed by Volkswagen had the effect of removing or rendering inoperative devices or elements of the emissions control system installed in new vehicles in compliance with CAA regulations, in violation of Section 203(a)(3)(A) of the CAA; and that Volkswagen failed to disclose the existence of the auxiliary emission control devices in the COC applications for test groups for new vehicles, in violation of the reporting requirements found in Section 203(a)(2) of the CAA. Part A of Title II of the CAA, which deals with emissions standards for moving sources, does not provide for criminal penalties. It is possible, however, that VW or its officials could face criminal charges based on other statutes. For example, DOJ could pursue charges under federal mail fraud or wire fraud prohibitions if VW has used either medium to convey false information in service of a "scheme or artifice to defraud." In addition, CAA violations like those described in the January 2016 Complaint can trigger civil penalties. Section 205 of the CAA sets forth civil penalties for these violations. The January 4, 2016, complaint provided further details regarding the potential penalties applicable to Volkswagen: For violations of the COC requirements found in Section 203(a)(1) of the CAA, the complaint stated that failure to comply with the requirements is a separate offense for each motor vehicle, and that pursuant to Section 205(a) of the CAA, VW could be liable for civil penalties of up to $32,500 per vehicle for each violation occurring before January 13, 2009, and for civil penalties of up to $37,500 for each violation occurring on or after January 13, 2009. For violations of the prohibition on installation of a "defeat device" found in Section 203(a)(3)(B) of the CAA, the complaint again stated that failure to comply with the requirements is a separate offense for each motor vehicle, and that pursuant to Section 205(a) of the CAA, VW could be liable for civil penalties of up to $2,750 per part or component installed vehicles prior to January 13, 2009, and for civil penalties of up to $3,750 per part or component installed on or after January 13, 2009. For violations of the prohibition on tampering found in Section 203(a)(3)(A) of the CAA, the complaint stated that each vehicle equipped with an auxiliary emission control device that removed or rendered inoperative devices or elements of the emissions control system installed in new vehicles constitutes a separate violation, and that pursuant to Section 205(a) of the CAA, VW could be liable for civil penalties of up to $32,500 per vehicle for each violation occurring before January 13, 2009, and for civil penalties of up to $37,500 for each violation occurring on or after January 13, 2009. For violations of the reporting requirements of Section 203(a)(2) of the CAA, the complaint stated that each failure to provide reports or information constitutes a separate violation, and that pursuant to Section 205(a) of the CAA, VW could be liable for civil penalties of up to $32,500 per day of violation occurring before January 13, 2009 and up to $37,500 per day of violation occurring on or after January 13, 2009. VW also faces the possibility of injunctive relief for each of the alleged violations pursuant to Section 204(a) of the CAA. This allows the court to take action to restrain VW from continued violations of the listed provisions. It should be noted that the potential penalties outlined above are not generally imposed, as automakers charged with such violations generally negotiate a lower penalty with EPA to settle the case. For example, DOJ sued Toyota for $58 billion in environmental violations more than a decade ago, but Toyota settled with the government, resulting in, among other things, a $34 million penalty. This appears to have been the avenue chosen by VW and DOJ in this instance, as discussed below. In addition, it should be noted that Section 205 of the Clean Air Act specifically requires courts to consider a violator's ability to pay a penalty and remain in business when assessing a civil penalty. Section 205 states the following: In determining the amount of any civil penalty to be assessed under this subsection, the court shall take into account the gravity of the violation, the economic benefit or savings (if any) resulting from the violation, the size of the violator's business, the violator's history of compliance with this title, action taken to remedy the violation, the effect of the penalty on the violator's ability to continue in business, and such other matters as justice may require. For more information on enforcement actions and settlements for noncompliance with federal pollution control requirements, see CRS Report RL34384, Federal Pollution Control Laws: How Are They Enforced? . On January 15, 2016, DOJ's litigation, which had been initiated in the Eastern District of Michigan, was transferred to the U.S. District Court for the Northern District of California in order to consolidate it with an ongoing litigation in which a number of private parties have filed claims based on VW's alleged wrongdoing. Subsequently, VW reached a series of settlements that may resolve many of its liability issues related to the installation of defeat devices in 2.0L diesel vehicles. In addition to filed settlements related to alleged violations of Federal Trade Commission (FTC) regulations and private liability claims, a Proposed Partial Consent Decree filed on June 28, 2016, appears to resolve VW's potential liability for the violations of CAA requirements described above. The consent decree also appears to resolve VW's potential liability for violations of the California Health and Safety Code and the California Code of Regulations. According to the Notice of Lodging of Proposed Partial Consent Decree issued by DOJ on July 6, 2016, "[t]he three settlements resolve separate claims but offer coordinated relief." This coordinated relief provided for in the three settlements includes the following: VW must offer all eligible owners and lessees of eligible vehicles the option to have VW buy back their cars or to terminate their leases at no cost. VW may submit for EPA and CARB review and approval a proposal for modifying these 2.0 liter vehicles to reduce emissions. If EPA and CARB approve an emissions modification for any category of the 2.0 liter vehicles, VW may offer all eligible owners and lessees the additional option of receiving an emissions modification in lieu of a buyback. VW must fund a trust over three years in the total amount of $2.7 billion, which states, Puerto Rico, the District of Columbia, and Indian tribes can use to perform specified NO x mitigation projects. VW must achieve a recall rate (through the buyback, lease termination, scrapped vehicles, and the emissions modification option, if approved) of 85% by June 30, 2019. If it fails to do so, VW must augment the mitigation trust fund discussed below by $85 million for each 1% that it falls short of the 85% rate. VW must also achieve a separate 85% recall rate for vehicles in California, and must pay $13.5 million to the mitigation trust (solely for mitigation projects in California) for each 1% that it falls short of this target. In connection with the buyback, VW must pay eligible owners no less than the cost of the retail purchase of a comparable replacement vehicle of similar value, condition, and mileage as of September 17, 2015, the day before the existence of the defeat devices was made known to the public. The Decree acknowledges that VW may satisfy this obligation through offering the payments required by the FTC Order and the Class Action Settlement, which are at least equal to the retail replacement value. The buyback/lease termination program under the Decree remains open for two years after the Decree is entered by the court. (See Decree Section IV.A and Appendix A.) If EPA and CARB approve an emissions modification, VW must offer it to consumers indefinitely. VW must invest $2 billion over a 10-year period to support the increased use of zero emission vehicle (ZEV) technology in the United States, including the development and maintenance of ZEV charging stations and infrastructure. Note that the proposed consent decree, the FTC settlement, or the private settlement would not absolve VW of potential civil penalties claimed by the federal government in the January 2016 Complaint, or of any potential criminal charges related to this matter. What I s the Next Step in the Federal Proceedings ? The publication of notice of the Proposed Consent Decree triggered a 30-day public comment period, which concluded on August 6, 2016. If the Proposed Consent Decree is approved and adopted by the U.S. District Court for the Northern District of California following review of the public comments, it will become binding on the parties, and DOJ's claims for injunctive relief will be dismissed. It is not clear how the outstanding DOJ claims for civil penalties will be addressed going forward. Since the 1970s, EPA has repeatedly found manufacturers using defeat devices in violation of the CAA. When it determines that defeat devices have been installed, EPA begins enforcement proceedings. In response, automakers often voluntarily recall the vehicles and/or settle with EPA and DOJ. For example, in 1998 Honda and Ford agreed to pay $267 million and $7.8 million, respectively, for fines and pollution mitigation. Other cases where EPA has accused manufacturers of installing defeat devices include automakers VW (1973), Chrysler (1973), and General Motors (1995); heavy-duty engine manufacturers Caterpillar, Cummins, Detroit Diesel, Mack, Navistar, Renault and Volvo (1998); parts manufacturers Casper's Electronics (2013); Edge Products (2013); and Harley-Davidson (2016). For a selected list of cases involving defeat devices, see Table 2 . Congress' initial role was to establish the anti-defeat device provisions in the 1970 amendments to the CAA. On October 8, 2015, representatives of VW and EPA testified on the VW anti-defeat devices before the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations. Given the extensive reporting about and high visibility of VW's use of defeat devices, Congress may wish to conduct further oversight. Potential issues include whether EPA has sufficient resources to monitor vehicle emissions, whether the current penalty structure is sufficient, why EPA failed to detect VW's defeat device when there have been similar cases in the past, and whether VW's response to the emissions problem and efforts to provide restitution to U.S. customers have been adequate. Congress may also look to provide more oversight of EPA rulemaking for motor vehicle emissions standards. The problems with VW's diesel emissions controls also are relevant to the proposed Transatlantic Trade and Investment Partnership (TTIP), now under negotiation between the United States and the European Union. Among many other topics, the negotiators are discussing harmonization of U.S. and EU vehicle regulations to make it simpler to sell U.S.-made vehicles in the EU and vice versa. Harmonization of environmental regulations and testing procedures are among the issues under discussion.

The German automotive manufacturer Volkswagen Automotive Group (VW) has admitted to installing a software algorithm in several of its diesel-fueled vehicle engines that acts as a "defeat device": the software detects when the vehicle is undergoing compliance testing and activates certain pollution control devices to reduce tailpipe emissions. During normal driving situations, however, the control devices are turned off, resulting in higher emissions of nitrogen oxide (NOx) and other air pollutants than claimed by the company. Federal and California regulators and the European Union (EU) have examined the use of this software, which was reportedly installed in 11 million vehicles worldwide. A summary of federal and state actions includes the following: September 18, 2015: the U.S. Environmental Protection Agency (EPA) issued a notice of violation (NOV) of the Clean Air Act (CAA) to VW, contending that 2.0 liter Volkswagen and Audi diesel cars (model years 2009-2015) include software that circumvents EPA standards for NOx, allowing emissions up to 40 times the standard. November 2, 2015: EPA issued a second NOV alleging that VW installed defeat devices in light-duty diesel vehicles equipped with 3.0 liter engines for model years 2014-2016, resulting in NOx emissions increases nine times the EPA standard. January 4, 2016: the U.S Department of Justice (DOJ) filed a civil complaint against VW on behalf of EPA in federal court alleging that nearly 600,000 diesel vehicles had illegal defeat devices installed, thereby impairing emissions controls and causing harmful air pollution in excess of EPA standards. EPA stated that it will not grant a certificate of conformity for VW's model year 2016 diesel vehicles, thus halting sales of these vehicles in the United States. The California Air Resources Board initiated an investigation into VW's use of this "defeat device," and, on January 12, 2016, issued a NOV to VW, alleging that "approximately 75,688 California vehicles do not conform to State law." June 28, 2016: EPA, the state of California and the Federal Trade Commission (FTC) announced a settlement with VW with regard to its 2.0 liter vehicles, including a $10 billion buyback of affected cars from consumers, and $4.7 billion to mitigate pollution and support zero emission vehicle technology. This report is organized as a series of frequently asked questions. It focuses on a description of modern diesel technologies, their market and emissions profiles, and some potential reasons that could underlie the use of defeat devices. It summarizes the specific allegations filed against VW under the CAA, the current status of federal and state investigations, and the civil and potential criminal penalties that may result. Further, the report introduces several outstanding issues currently under debate, including whether EPA has sufficient resources to monitor vehicle emissions, whether the current penalty structure is sufficient, why EPA failed to detect VW's defeat device when there have been similar cases in the past, and whether VW's response to the emissions problem and efforts to provide restitution to U.S. customers have been adequate.

Currently, U.S. meat and poultry slaughter facilities and processing plants operate under one of two parallel inspection systems. The one familiar to most people is the federal meat and poultry inspection system administered by the U.S. Department of Agriculture's (USDA's) Food Safety and Inspection System (FSIS). The other is made up of 27 separate state-administered inspection programs. Federal law has prohibited state-inspected meat and poultry plants from shipping their products across state lines, a ban that many states and small plants have long sought to overturn. Both the House and Senate versions of the omnibus farm bill ( H.R. 2419 ) included amendments to the Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA) that would permit interstate shipment of these products if USDA approves and certain requirements are met. However, the Senate approach diverged in significant ways from the House version. The conference farm bill, cleared in May 2008, generally opted for the Senate approach, viewed by many on both sides of the issue as an acceptable compromise. Proponents of ending the current ban have long argued that limiting state-inspected products to intrastate commerce is unfair. Many state agencies and state-inspected plants have argued that their programs by law already must be, and are, "at least equal" to the federal system. While state-inspected plants cannot ship interstate, foreign plants operating under USDA-approved foreign programs, which are to be "equivalent" to the U.S. program, can export meat and poultry products into and sell them anywhere in the United States. Advocates for change have contended that that they should not be treated less fairly than the foreign plants, and that foreign programs are not as closely scrutinized as state programs. Opponents of allowing state-inspected products in interstate commerce have argued that state programs are not required to have, and do not have, the same level of safety oversight as the federal, or even the foreign, plants. For example, foreign meat and poultry products are subject to U.S. import reinspection at ports of entry, and again, when most imported meat is further processed in U.S.-inspected processing plants. Opponents also contended that neither the USDA Inspector General (OIG) in a 2006 report nor a relevant 2002 federal appeals court ruling would agree, without qualification, that state-inspected meat and poultry were necessarily as safe as federally inspected products. Approximately 2,100 meat and poultry establishments in 27 states are subject to state-conducted rather than federal inspection programs. However, these state programs are operated in accordance with cooperative agreements that USDA's Food Safety and Inspection Service (FSIS) has with each of the states; the federal government also provides 50% of the cost of state programs. The "Federal and State Cooperation" provisions of the FMIA (21 U.S.C. 661) were added by the Wholesome Meat Act of 1967 (P.L. 90-201). Congressional Quarterly (CQ) at the time of the 1967 legislation observed that the state cooperation provision was "[t]he farthest-reaching portion [of the measure] ... aimed at helping--or, if necessary, forcing--states to strengthen their own meat inspection systems." All plants providing meat for interstate and foreign commerce had been subject to federal inspection regulations basically since passage of the Meat Inspection Act of 1907. However, plants that limited their product sales within a state were covered by what critics described as a patchwork of varying, often inadequate laws and regulations; seven of them had no inspection at all, according to CQ. "Revelations in the press and during committee hearings about slaughter and packing practices at some state plants made meat inspection the most emotional consumer issue of 1967." Currently, the Secretary of Agriculture (hereafter, USDA or FSIS) is authorized to approve a cooperative program in any state if it has enacted a "law that imposes mandatory ante mortem and post mortem inspection, reinspection and sanitation requirements that are at least equal to those under Title I of [the FMIA], with respect to all or certain classes of persons engaged in the State in slaughtering amenable species [i.e., cattle, sheep, swine, goats, equines], or preparing the carcasses, parts thereof, meat or meat food products, of any animals for use as human food solely for distribution within such State" (21 U.S.C. 661(a)(1); emphasis added by CRS). Section 661 also requires USDA to assume federal inspection of state plants whenever a state decides to terminate its own program, or USDA determines that FMIA requirements are not being met. Pursuant to the FMIA as amended by the Wholesome Meat Act, USDA-FSIS must receive a formal request for a program from the governor, and review the state's laws, regulations, and performance plan (including funding, staffing, training, labels and standards, enforcement, laboratory and testing procedures, and other aspects). To ensure continued compliance, FSIS annually certifies state programs based on a review of materials (like performance plans and an annual report submitted by the state); FSIS also conducts a more comprehensive review of each state every one to five years. Section 11103 of the House version of H.R. 2419 would have rewritten rather than merely amended Title III of the FMIA. It would have entailed a number of major departures from current authority. The Senate language was approved as Section 11067. House-Senate conferees generally adopted the Senate language, as Section 11015 of the final bill. Unlike the provisions in the House bill, the conference-adopted Senate language would not replace Title III (federal-state cooperation) in the current FMIA. Rather, it would create a new Title V--Inspections by Federal and State Agencies. Currently, state-inspected meat cannot be sold in interstate commerce. Under the Senate bill as endorsed by the conference committee, state programs currently operating under the Title III "at least equal to" requirements presumably could continue, so long as products were not shipped across state lines. The new Title V would enable many state-inspected establishments--i.e., those already covered by Title III--to be selected by USDA (in cooperation with the state agency) to receive the federal mark of inspection and ship products in interstate commerce. Although state inspectors could continue to be in these designated plants, inspection in such plants essentially would be under federal supervision. More specifically, under the conference (and Senate ) bill, the U.S. Secretary of Agriculture would be required to designate and directly supervise a federal employee as the state coordinator for each appropriate state agency. This new coordinator's responsibilities would be to provide oversight and enforcement of Title V, and to oversee state training and inspection activities by state personnel. The coordinator would have to visit the covered establishments to ensure they are operating consistently with the FMIA, submit quarterly reports on each establishment's status and compliance, and "deselect" plants or suspend their inspection if they violate any requirement. The House language would have explicitly allowed "the shipment in commerce" of products (i.e., carcasses, carcass parts, meat, and meat food products) under the newly approved Title III programs. Another House provision would have changed Title IV of the current FMIA to further direct that "a State or local government shall not prohibit or restrict the movement or sale of meat or meat food products that have been inspected and passed in accordance with the Act for interstate commerce." Currently USDA is authorized to approve state programs that have requirements at least equal to federal requirements. According to FSIS, "at least equal to" now means "that the food safety and other consumer protection measures effected by a State program address the same issues addressed by the Federal (FSIS) program, and the results of the State's approach are to be at least as effective as those of the Federal program. The State program need not take exactly the same action as the Federal program." The proposed House language would have authorized USDA to approve (and then enter into cooperative agreements with) only those state programs that "adopt (including adoption by reference) provisions identical to titles I, II, and IV (including the regulations, directives, notices, policy memoranda, and other regulatory requirements under those titles) ..." States would have had to ensure that their products bear a mark of state inspection as the official mark. Titles I, II and IV essentially are all other provisions of the FMIA, which cover such components as inspection requirements, definitions of adulteration and misbranding, and enforcement authorities, among other provisions. The conference (and Senate ) bill would limit eligible establishments to those with 25 or fewer employees. Also, USDA would be authorized to develop procedures enabling state-inspected establishments with more than 25 employees to shift to regular federal inspection. Finally, under the conference ( Senate ) version, state-inspected plants with more than 25 employees but fewer than 35 employees could be selected for the new state program, but they would have to shift to regular federal inspection within three years of promulgation of a final rule. The House version would have imposed a restriction limiting the size of an establishment that could be accepted under a new state program to no more than 50 employees. However, it appears that larger establishments could have continued to participate if they became state-inspected within 90 days of enactment. Under the conference (and Senate ) bill, current, future, and previously federally inspected establishments would be ineligible to join the new state program. Under the House bill, certain establishments that currently are federally inspected could have applied for inspection under the new state program if their states had one. Currently, USDA and the states with programs enter into formal cooperative agreements that provide for, among other things, matching federal funds of 50%. Under the conference bill, states would continue to be eligible for federal reimbursement, but now for up to 60% of the cost of their meat and poultry inspection programs. Conferees deleted a provision in the Senate bill that would have reimbursed a state for 100% of eligible costs if the state provided additional microbiological verification testing of selected establishments. The conference (and Senate ) bill also would create a new technical assistance division at FSIS to coordinate training, education, technical assistance, and outreach for very small and certain smaller-sized establishments. The state inspection provisions of the House-passed farm bill essentially were adapted from language found in H.R. 2315 / S. 1150 , introduced, respectively, by Representative Pomeroy in May and Senator Hatch in April 2007. Introduced in March 2007 by Representative Kind and in April 2007 by Senator Kohl, H.R. 1760 / S. 1149 , would strike the provisions in the FMIA and PPIA that prohibit the interstate shipment of state-inspected meat and poultry. The bills also would set the federal reimbursement rate for state costs at no less than 50% and no more than 60%. Under the new farm bill, for the first time in 40 years, meat and poultry that is not federally inspected could be shipped across state lines. These and other pending changes raised a series of issues that were debated by proponents and opponents of the legislation. At issue have been the impacts, if any, of these changes on the safety of meat and poultry products. Concerns about any adverse effects stem largely from the supposition, long held by consumer advocates and other critics, that state inspection programs do not provide the same level of safety as the federal inspection programs. As noted, state measures now must be "at least equal to" the federal measures, notably including mandatory ante mortem and post mortem inspection, reinspection and sanitation requirements. The current FSIS state review manual provides more specifics on how this is to be achieved. For example, under FSIS rules promulgated in 1996, each federally inspected establishment must have a HACCP (for hazard analysis and critical control point) plan that identifies each point in its process where contamination could occur, have a remedy to control it, implement the plan, monitor the process, and keep detailed records. As part of the plans, all operations must have site-specific standard operating procedures (SOPs) for sanitation. USDA inspectors check the establishment's records to verify a plant's compliance. Accordingly, the FSIS state review manual directs that "State MPI Program officials also must verify a HACCP or equivalent system that evaluates hazards, takes steps to address hazards, and routinely verifies that product is safe, wholesome, unadulterated, and properly labeled." FSIS must approve and regularly review the states to ensure that they are following these types of procedures. The House farm bill language would have gone even further by requiring that they be identical, and making it clear that this applies to all "regulations, directives, notices, policy memoranda, and other regulatory requirements." Moreover, a condition of acceptance into the new state program would have been that the state implement, within 180 days of a USDA review of its system, all changes identified in the review to ensure enforcement of federal requirements. A possible indication of its more prescriptive nature was that the National Association of State Departments of Agriculture (NASDA), which promoted interstate shipment legislation for many years, had once suggested that it might not support a proposal with a requirement that states adopt "identical" rules. Nonetheless, supporters of the House bill had argued that it would replace the current collection of 27 separate state programs with a single type of state program operating seamlessly with the federal system. On the other hand, opponents of the House bill countered that it was unclear whether or not the "identical" language would also apply to all activities associated with inspection, some of which might fall outside of the "regulations, directives, notices, policy memoranda and other regulatory requirements." Would or could the language apply, for example, to states' certifying procedures and contractual relationships with testing laboratories? What about staffing and training practices? Opponents of the House farm bill language had argued that at a minimum, these types of questions should be answered before a new program was passed that might continue some "at least equal to" activities that, in their view, have been substandard. They cited a September 2006 report by USDA's Office of Inspector General (OIG) that examined FSIS's oversight of the state programs. Though FSIS routinely gathers state staffing data, it does not use the data to determine if state staffing levels are appropriate for carrying out inspection activities, so some state programs may not have enough personnel to ensure their programs are "at least equal to" the federal program, OIG concluded. FSIS state reviews did not include determinations of whether laboratories used by the state to test products were providing accurate, reliable results, OIG also concluded, adding that FSIS officials told the OIG investigators that these were outside the scope of the FMIA and PPIA. One area where state and federal programs may diverge is in their sampling and testing methodologies used to verify that HACCP plans are producing safe products. Inspection officials have argued that regardless of which particular testing system is used, it has to be scientifically and legally defensible; critics have asserted that different methodologies can lead to different safety findings and therefore potentially different levels of safety. Another area where a present state program may differ from the federal system is in staffing and training; some states, for example, avail themselves of at least some USDA training; others may prefer their own programs--but all must meet basic outcomes. By requiring a federal employee to oversee each new state program, and by creating a new FSIS training division, drafters of the Senate bill (adopted by conferees) aimed to address concerns about these aspects of state-level inspection. The Senate Agriculture Committee held a hearing in April 2000 on a proposal ( S. 1988 ) by Senator Daschle to permit state-inspected products in interstate commerce, if the programs adopted all federal inspection requirements. At that hearing, the director of the Ohio Department of Agriculture argued that state personnel are generally more accessible and flexible in providing inspection resources geared to the needs and time constraints of small plants; and that states offer practical information, technical assistance, and other support to smaller plants that lack the scientific and legal expertise needed to deal with government regulations. Furthermore, the Ohio director characterized the federal system as a "multilayered chain of command [with a] frequently adversarial attitude." Several meat processing companies also testified that communicating with state officials to solve problems was far easier than with federal officials. Pressed for more specifics on barriers to joining federal inspection, the Ohio director cited three reasons. First, USDA's plant design and engineering requirements include elements that, he said, do not relate to food safety but would be expensive to meet--changing 3-inch drains to 4-inch drains, for example. Second, plants would rather communicate with the state than federal "bureaucracy," as noted above. Third is overtime costs (which plants pay for inspection beyond regularly scheduled shifts); the federal government charges considerably more than states. In a 2001 report, the University of Nebraska examined, for the state legislature, the potential impacts of adopting a state inspection program there. It polled other states to determine why some adopt such programs and others do not. Among those that chose to maintain state inspection, the most frequently cited factor was "the desire for greater responsiveness to the unique needs of producers and processors." Consumer advocates interpret the communication and flexibility arguments to mean that companies can more easily influence states to adopt less stringent safety requirements or to enforce them less rigorously. One consumer advocate who testified at the 2000 Senate hearing argued that the state "equal to" provision was adopted as a compromise: The 1967 Wholesome Meat Act "was driven by the revelation of filthy conditions and the lack of standards in state-inspected meat plants and the need to improve physical facilities and sanitation practices. However, it became clear that some of the smallest plants could not meet the physical facility requirements of the proposed law.... There was no discussion in 1967 of the potential public health risk inherent in this action, but the prohibition on sale across state lines recognized that these products were likely not to be the same as those produced in federally inspected plants." Such advocates continue to assert that state standards are not as strong as federal standards, regardless of the "equal to" determination. Neither the OIG in its 2006 report nor a relevant 2002 federal appeals court ruling would agree, without qualification, that state-inspected meat and poultry are necessarily as safe as federally inspected products. The OIG report concluded, for example, that although FSIS had a manual with detailed procedures and checklists for conducting onsite state reviews, "how the agency arrived at its decisions regarding the acceptability of State MPI (meat and poultry inspection) programs are not clearly documented in FSIS' summary reports. In other words, while the manual establishes clear guidelines for identifying problems in State MPI programs, how those problems are weighed in the determination and documented in the summary report [on a state program] was less clear. This condition was caused by the agency's decision to eliminate specific decision-making criteria from its comprehensive review methodology." OIG noted elsewhere in its findings: "When the agency revised its directives for inspecting these programs, an agency official said FSIS eliminated specific criteria for weighing violations and rendering decisions in order to avoid being overly prescriptive and to allow reviewers to use their discretion. Officials reviewing these programs thus lack clear, objective, and uniform guidelines for weighing the effect of establishment deficiencies on State MPI program findings and for documenting the relationship between these violations and the final determinations." OIG said, for example, that FSIS had granted "at least equal to" status to several states even though they found HACCP and sanitation deficiencies in establishments in those states--and the deficiencies were similar to those from a review of another state program where "significant concerns" were cited. In Dailey v. Veneman , a federal appeals court in 2002 upheld a district court's decision to reject Ohio's legal bid to gain interstate acceptance of its state-inspected products. Among other arguments, Ohio had asserted that the lower court should have accepted as true the allegation that state-inspected products were as safe as federally and foreign-inspected meat and poultry and the current federal law lacks a rational basis for treating state-inspected meats and poultry differently. The appeals court responded in part: "Though the USDA does keep an eye on state inspection programs, it keeps yet a closer eye on its own plants and on meat and poultry entering the country, and it is possible that a state program could deteriorate for a time without the USDA's knowledge. This policy provides a rational basis for Congress to restrict the interstate transport of state-inspected meat." CRS informal discussions in 2007 with various state and federal inspection experts suggest that many state inspection procedures look remarkably similar (and often may be identical) to those in federal establishments, including all key ante-mortem and post-mortem functions. For example, in all state programs, a government veterinarian examines all live animals before they are slaughtered, just as in the federal system. Trained state inspectors observe slaughter and processing operations and look for virtually the same problems that federal inspectors are looking for, according to these experts. Where the inspection process may diverge appears primarily to be in how the inspector communicates with the establishment to correct deficiencies, those knowledgeable with the programs explain. Federal officials, for example, might simply point out a deficiency and possibly inform the establishment where it might look for information or assistance to correct the situation. State officials are more likely to work directly with the plant, providing technical assistance and other resources to remedy the problem, these inspection experts explained. A longstanding argument, that federal rules require plants to undertake costly plant and equipment changes, may be less relevant today since all plants, including small and very small ones, now are expected to be operating under HACCP plans, according to those knowledgeable about federal-state inspection. Recordkeeping by establishments and verification by inspection personnel are used to ensure that the system is working. Since January 2000 all slaughter and processing operations, including small and very small establishments, are required to have HACCP plans in place under the federal inspection program--and all state programs also have incorporated HACCP or equivalent plans, these experts state. HACCP by nature is less prescriptive with regard to how individual establishments achieve the standards of safety, they add. The president of NASDA in 2007 asserted that USDA pays much closer attention to the state programs than to foreign programs. "State inspection programs undergo annual audits containing more than 125 pages of compliance procedures. By comparison, USDA's audit document for evaluating the 38 foreign inspection systems is a one-page checklist." This question first arose out of two provisions in the House bill. First, Section 302(d), Restriction on Establishment Size, stated that after the date that is 90 days after enactment, "establishments with more than 50 employees may not be accepted into a State meat inspection program. Any establishment that is subject to state inspection on such date, may remain subject to State inspection." Second, Section 306, Federal Inspection Option, stated that "[a]n establishment that operates in a State with an approved State meat inspection program may apply for inspection under the State meat inspection program or for Federal inspection." (Such an establishment cannot apply more than once every four years.) There was concern that under the House bill, larger plants could have evaded the size restriction by coming under state inspection if they did it within the initial 90 days of enactment. There was some uncertainty as to whether this 90-day window in the House bill would have applied to larger plants that want to enter existing state programs, or whether this would have applied to the newly authorized state program, although it would appear that the existing programs would no longer have been authorized under the proposal. Assuming that the House legislation implied the latter situation, then further uncertainty arose regarding whether a state could apply for and achieve recognition within such a short time period. The conference-adopted Senate language, by adding a new Title V, supplements rather than replaces the existing state programs. Consumer advocates and employee unions had found the second House provision--to permit federal plants to convert to state inspection--to be one of the more controversial provisions. They cited statistics provided by USDA that there are 5,603 federally inspected meat and poultry plants. Of these, approximately 80% (or more than 4,500) have fewer than 50 employees, creating the potential for an exodus from the national program. "With that change, if a federal inspector pressures a meat packer to improve sanitation, the packer could instead try to negotiate a more understanding regulatory response from his state inspection program," these groups recently argued. This would have threatened not only food safety but also the jobs of thousands of federal inspection employees, they claimed. "The provisions would also unleash lobbying campaigns to set up state inspection programs in the 22 (now 23) states that currently do not have them so plants in those states can also seek 'more understanding' enforcement of food safety laws under state programs." The Senate "compromise" language adopted by conferees clarifies that current, future, or prior federal establishments would not be eligible for the new state inspection program. Under Section 20 of the FMIA (and Section 466 of the PPIA), FSIS is responsible for determining the equivalence of other countries' meat and poultry safeguards. A foreign plant cannot ship products to the United States unless FSIS has certified that its country has a program that provides a level of protection that is at least equivalent to the U.S. system. FSIS experts visit the exporting country to review its rules and regulations, meet with foreign officials, and accompany them on visits to slaughtering and processing plants. When a foreign program is approved, FSIS relies on that government to certify eligibility of, and to inspect, the plants. FSIS periodically reviews foreign government documents and conducts on-site audits at least annually to verify continuing equivalence. In addition, FSIS operates an extensive reinspection program at U.S. border entry points. Food safety equivalence is a concept the United States adopted as a signatory to the 1994 Uruguay Round (UR) trade agreements, and specifically the Agreement on the Application of Sanitary and Phytosanitary Measures (the SPS agreement). Article 4.1 of the SPS agreement states: Members shall accept the sanitary or phytosanitary measures of other Members as equivalent, even if these measures differ from their own or from those used by other Members trading in the same product, if the exporting Member objectively demonstrates to the importing Member that its measures achieve the importing Member's appropriate level of sanitary or phytosanitary protection. For this purpose, reasonable access shall be given, upon request, to the importing Member for inspection, testing and other relevant procedures. According to FSIS, the burden for demonstrating equivalence rests with an exporting country. The agency's initial evaluation to determine foreign equivalence is quite extensive and detailed. As a practical matter, it would appear to be difficult for a foreign country to demonstrate successfully that any system that is not nationally administered (i.e., state, local) should be recognized as equivalent; apparently, none are so recognized currently. In fact, countries that ship meat and poultry to the United States are more likely to have dual safety regimes: one for the plants that sell domestically, and another, certified by the United States (and possibly other countries) as equivalent for export. If the conference bill permits products inspected by states into commerce (and if such commerce included foreign as well as interstate shipments), it might be reasonable to assume that other countries with their own "state systems" could seek new equivalency determinations which encompass such systems. As described earlier, the new farm bill would explicitly allow the shipment in commerce of products (i.e., carcasses, carcass parts, meat, and meat food products) under the newly approved programs. Some have argued that the new language should be interpreted to cover only commerce between (not outside) the states and territories. However, Title I of the current FMIA defines commerce as "commerce between any State, any Territory, or the District of Columbia, and any place outside thereof; or within any Territory not organized with a legislative body, or the District of Columbia." Related USDA questions have included whether individual states might be negotiating with foreign trading partners about import policies and conducting their own audits of foreign establishments, whether trading partners would audit all state programs, whether some states could export products to a particular country while others could not, and whether the United States would (and could) segregate products intended for export based upon state of origin. Food safety advocates and others frequently cite the incidences of foodborne pathogens and of foodborne illnesses as reasons to be concerned about food safety programs. A frequently cited estimate used by federal officials and food safety advocacy groups alike is that each year, 76 million people become sick, 325,000 are hospitalized, and 5,000 die from foodborne illnesses caused by contamination from any one of a number of microbial pathogens. It also should be noted that these estimates reflect illnesses related to all types of foods, not solely to meat and poultry products. The CDC does observe: Raw foods of animal origin are the most likely to be contaminated; that is, raw meat and poultry, raw eggs, unpasteurized milk, and raw shellfish. Because filter-feeding shellfish strain microbes from the sea over many months, they are particularly likely to be contaminated if there are any pathogens in the seawater. Foods that mingle the products of many individual animals, such as bulk raw milk, pooled raw eggs, or ground beef, are particularly hazardous because a pathogen present in any one of the animals may contaminate the whole batch. A single hamburger may contain meat from hundreds of animals. A single restaurant omelet may contain eggs from hundreds of chickens. A glass of raw milk may contain milk from hundreds of cows. A broiler chicken carcass can be exposed to the drippings and juices of many thousands of other birds that went through the same cold water tank after slaughter. In April 2007 and April 2008 reports, the CDC compared the incidence of various foodborne infections in 2006 with baseline data from 1996-1998. The reports observed that significant declines in the incidence of certain foodborne pathogens have occurred since 1996, but generally the declines were before 2004. The April 2007 CDC report had observed that an earlier decline in Shiga toxin-producing E. coli O157 (STEC O157) infections was "temporally associated" with measures by FSIS and by beef processors to reduce ground beef contamination--measures which were "accompanied by a decline in the frequency of isolation of STEC O157 from ground beef in 2003 and 2004." Further, although the frequency of finding the pathogen in products in 2005 and 2006 was the same level as in 2004, "Reasons for the increases in human STEC O157 infections in 2005 and 2006 are not known." While not attributing this to either meat and poultry or to produce, the CDC did take note of STEC O157 outbreaks in 2006 caused by contaminated lettuce and spinach. The CDC report explained that transmission of Salmonella to humans can occur via many vehicles, including produce, eggs, poultry and other meat, and direct contact with animals and their environments. (It also noted an occurrence through tomatoes in 2006.) However, the report noted that poultry is an important source of human Salmonella infections. It also discussed the FSIS initiative to reduce Salmonella in poultry and other meat, and that in 2006 the lowest percentages of chickens tested positive for the pathogen. The FSIS pathogen testing cited by the CDC is one of the ways the agency monitors the effectiveness of establishments' HACCP plans. Consumer advocates, industry officials, and others closely follow both FSIS testing results and the CDC disease reports, and often speculate about their significance. Nonetheless, neither FSIS testing results nor this CDC report appear to offer any conclusive evidence of a causal relationship between FSIS program modifications on the one hand, and changes in the occurrence of foodborne illnesses on the other. Even if the difficulties in making such an attribution could be overcome, it would not likely answer the further question regarding the distinctions, if any, between federally inspected and state-inspected products as the cause of foodborne illnesses. Among other potential variables, state testing programs can differ from the federal programs, making comparisons between testing results difficult at best. As noted, the new farm bill would amend the FMIA and PPIA in order to modify a key element of federal food safety policy that has been in place for 40 years. At the heart of the debate has been a seemingly simple question: do, or can, state programs provide the same assurance of product safety as the federal program? If the bill becomes law, stakeholders will turn their attention to USDA, which will be required to implement the new provisions. This rulemaking process can be expected to fill in many of the details on program operation and, ultimately, to help determine its effectiveness.

Federal law has prohibited state-inspected meat and poultry plants from shipping their products across state lines. The final conference version of H.R. 2419, the omnibus farm bill, amends the Federal Meat Inspection Act and the Poultry Products Inspection Act to permit such interstate shipment under certain conditions. Limiting state-inspected products to intrastate commerce is unfair, many state agencies and state-inspected plants have long argued, because the 27 currently state-operated programs by law already must be, and are, "at least equal" to the federal system. Meanwhile, foreign plants operating under U.S. Department of Agriculture (USDA)-approved foreign programs, which are to be "equivalent" to the U.S. program, can export meat and poultry products into and sell them anywhere in the United States. Advocates for change have contended that they should not be treated less fairly than the foreign plants which, they say, are not as closely scrutinized as state plants. Opponents have argued that state programs are not required to have, and do not have, the same level of safety oversight as the federal, or even the foreign, plants. For example, foreign meat and poultry products are subject to U.S. import reinspection at ports of entry, and again, when most imported meat is further processed in U.S.-inspected processing plants. Opponents also have contended that neither the USDA Office of Inspector General in a 2006 report nor a relevant 2002 federal appeals court ruling would agree, without qualification, that state-inspected meat and poultry were necessarily as safe as federally inspected products. The Senate-passed farm bill--the approach ultimately adopted by conferees--supplements the current federal-state cooperative inspection program with a provision whereby state-inspected plants with 25 or fewer employees could opt into a new program that subjects them to federally directed but state-operated inspection, thus allowing them to ship interstate. The Senate version reportedly was developed as a compromise by those on both sides of the issue. The House-passed farm bill would have replaced (rather than supplemented) the current federal-state cooperative inspection programs with a new program to enable meat and poultry that is not federally inspected to be shipped across state lines, so long as the state programs adopted standards identical to those of USDA along with any additional changes USDA required. The House bill also would have enabled many plants currently under federal inspection to apply for state inspection and continue to ship interstate. Opponents of this change feared that many would seek to opt out of the federal system if they believed that could receive more lenient oversight by the states--an assertion that state proponents dismissed. If the conference farm bill becomes law, as many anticipate, stakeholders will next turn their attention to USDA, where implementation details will be determined through the rulemaking process.

Many voices, domestic and international, have called upon the United States and other industrialized countries to increase foreign assistance to lower- and middle-income countries to address climate change. Proponents maintain that such assistance could help promote climate-friendly and high-growth economic development in these countries, while simultaneously protecting the more vulnerable nations from the effects of a changing climate. For their part, most, if not all, lower-income countries have stated that their success at combating climate change depends critically on receipt of international financial support. They argue that mitigating climate change pollutants, adapting to the effects of climate change, and building climate resilience into their development agendas incur costs above and beyond their normal economic growth trajectories. These costs are particularly challenging to nations that have scant resources compared to industrialized countries, do not recognize themselves as the historical sources of climate pollution, and consider alleviating poverty as their first priority. The Green Climate Fund (GCF) is an international financial institution connected to the United Nations Framework Convention on Climate Change (UNFCCC). The GCF was proposed by Parties to the UNFCCC during the 2009 Conference of Parties (COP) in Copenhagen, Denmark, and its design was agreed to during the 2011 COP in Durban, South Africa. The fund aims to assist developing countries in their efforts to combat climate change through the provision of grants and other concessional financing for mitigation and adaptation projects, programs, policies, and activities. The GCF is capitalized by contributions from donor countries and other sources, potentially including innovative mechanisms and the private sector. The GCF currently complements many of the existing multilateral climate change funds (e.g., the Global Environment Facility, the Climate Investment Funds, and the Adaptation Fund); however, as the official financial mechanism of the UNFCCC, some Parties believe that it may eventually replace or subsume the other funds. Expectations by many countries, specifically developing countries, are that the GCF becomes very large (i.e., in the range of several tens of billions to over $100 billion annually) and serves as the predominant institution for climate change assistance in the developing world. These countries believe that the agreement to establish the GCF has been a key success in the recent international negotiations. But others caution that ambitious steps need to be taken to ensure that the fund is operated correctly in order to achieve an adequate buy-in by donor countries of its effectiveness and by recipient countries of its legitimacy. The GCF was made operational in the summer of 2014. Parties called for an immediate capitalization of between $10 billion and $15 billion over the course of the first year. Initial funding came from Germany, France, and a dozen other countries who pledged approximately $2.3 billion during the United Nations Climate Summit in September 2014. Further pledges brought the total to approximately $10 billion by the close of 2014. The Obama Administration announced a pledge of $3 billion over four years during the G-20 meetings in Australia on November 15, 2014. The Administration's FY2016 budget requested $500 million for the fund. Notwithstanding these financial pledges, details remain to be worked out. While the governing board, a host city, and the basic design of the fund have been agreed to by Parties, many structural aspects have yet to be clarified, some involving long-standing and contentious debate. They include what role the GCF would play in providing sustained finance at adequate levels; how it would fit into the existing development assistance and climate financing architecture; whether sources beyond public funding would successfully contribute to it; and how it would allocate and deliver assistance efficiently and effectively to developing countries. The U.S. Congress--through its role in authorizations, appropriations, and oversight--would have significant input on U.S. participation in the fund, including whether and when to participate in the fund; whether and how much to contribute to the fund, and with what source or sources of finance; whether fund contributions would carry specific guidance in distribution and use; how contributions to the fund would relate to other U.S. bilateral, multilateral, and private sector climate change assistance; and whether and when to consent to negotiated treaty obligations, if submitted. The UNFCCC was the first formal international agreement to acknowledge and address human-driven climate change. The U.S. Senate provided its advice and consent to the Convention's ratification in 1992, the same year it was concluded. For the United States, the UNFCCC entered into force in 1994. As of November 2014, 196 governments are Parties. As a framework convention, the UNFCCC provides a structure for international consideration of climate change but does not contain detailed obligations for achieving particular climate-related objectives in each Party's territory. It recognizes that climate change is a "common concern to humankind," and, accordingly, requires parties to (1) gather and share information on greenhouse gas (GHG) emissions, national policies, and best practices; (2) launch national strategies for addressing GHG emissions and adapting to expected impacts; and (3) cooperate in preparing for the impacts of climate change. The UNFCCC did not set binding targets for GHG emissions; however, it did commit the higher-income Parties (i.e., those listed in Annex II of the Convention) to provide unspecified amounts of financial assistance to help lower-income countries meet the broad, qualitative obligations common to all Parties. As the treaty entered into force and the UNFCCC Conference of the Parties (COP) met for the first time in 1995, the Parties agreed that achieving the objective of the UNFCCC would require new and stronger GHG commitments. As a first step toward meeting this objective, the 1997 Kyoto Protocol was drafted and entered into force with a stated aim to reduce the net GHG emissions of industrialized country Parties (Annex I Parties) to 5.2% below 1990 levels in the period of 2008 to 2012. The United States signed the Kyoto Protocol in December 1997. However, at the time, opposition in Congress was strong. The Kyoto Protocol was not submitted to the Senate by President Bill Clinton or by his successor, President George W. Bush. Thus, the United States is not a Party to the Protocol. In 2007, UNFCCC Parties reconvened negotiations for further commitments beyond the Kyoto Protocol, and agreed to negotiate a suite of agreements that included new GHG mitigation targets for Annex I Parties, "nationally appropriate mitigation actions" for non-Annex I Parties, and other commitments for the post-2012 period. The mandates (referred to as the Bali Action Plan) specified that the products of negotiation should be ready by the end of 2009. Due perhaps to high expectations, as well as continued divergence among Parties on some key issues, the 2009 COP in Copenhagen, Denmark, did not produce a legally binding treaty, but a short, non-legally binding political document called the Copenhagen Accord. The Copenhagen Accord was a policy document drafted by leaders of about two dozen countries in the final hours of the 2009 COP, and subsequently acknowledged by 114 countries. The Accord sat in sharp contrast to the Kyoto Protocol, as its bottom-up and nationally appropriate model differed greatly from the top-down implementation of the Protocol. Provisions in the Accord included voluntary GHG mitigation efforts by all Parties, adaptation and forestry actions, technology transfer mechanisms, and transparency and reporting standards, as well as financial provisions by developed country Parties. The Accord also proposed the "Green Climate Fund" (GCF) to serve as the operating entity of the financial mechanism of the Convention. Many of the elements of the Copenhagen Accord, the Bali Action Plan, and the UNFCCC were adopted officially at the 2010 COP in Cancun, which yielded several decisions collectively called the Cancun Agreements. The establishment of the GCF--as well as some other financial arrangements mentioned in the Copenhagen Accord--was a central aspect of the negotiations, and was entered into the negotiating text of the UNFCCC's Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA). Climate finance provisions in the Cancun negotiating text (1/CP.16) included the following: Fast Start Financing. The agreement put forth a collective commitment by developed country Parties (not specified in the text) to provide new and additional resources approaching $30 billion for the period 2010-2012 to address the needs of developing countries (the allocation, or "burden-sharing," among countries was not specified in the text) (1/CP.16SS95). 2020 Pledge. The agreement took note of the pledge by developed country Parties (not specified in the text) to achieve a goal of mobilizing jointly $100 billion per year by 2020 to address the needs of developing countries (the allocation, or "burden-sharing," among countries was not specified in the text) (1/CP.16SS98). Sources. The agreement outlined that the pledged assistance was to be scaled-up, new and additional, predicable and adequate, and that it may come from a wide variety of sources, including public and private, bilateral, multilateral, and alternative (1/CP.16SSSS97, 99). Balanced Package. The agreement recognized that the financial pledges were offered in the context of continued negotiations toward a balanced package of commitments by all Parties that would include, among other items, meaningful actions on mitigation and transparency (1/CP.16SS98). Green Climate Fund. The agreement opened the way for the establishment of the GCF, to be designated as an operating entity of the financial mechanism of the UNFCCC, accountable to and under the guidance of the COP, to support projects, programs, policies, and other activities in developing country Parties (1/CP.16SS102). Transitional Committee. The agreement stipulated the formation of a Transitional Committee to design the fund, comprising 40 members, with 15 members from developed country Parties and 25 members from developing country Parties, with experience and skills in the areas of finance and climate change, in accordance with given Terms of Reference (1/CP.16SSSS109-110). The basic design of the GCF, recommended by the Transitional Committee, was adopted officially at the 2011 COP in Durban, South Africa, which yielded several decisions collectively called the "Durban Platform." The design of the GCF was a central aspect of the negotiations, and the approved guidelines, referred to as the "Governing Instrument of the Green Climate Fund," was entered into the negotiating text of the UNFCCC's Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA). Decisions on the GCF in the Durban negotiating text (CP.17) included the following: Status . The agreement designated the GCF as "the operating entity of the Financial Mechanism of the Convention" to be "accountable to and function under the guidance of the Conference of Parties to support projects, programmes, policies and other activities in developing country Parties" (3/CP.17SS3). Governance . The agreement set forth the composition of a board, to have 24 members, composed of an equal number from developing and developed country Parties, with representation from relevant United Nations groupings including Small Island States (SIDS) and Least Developed Countries (LDC) (3/CP.17SSA9). The decision invited Parties to submit their nominations for board membership (3/CP.17SS10). Functions of the board were to include designing operations, establishing funding windows, approving funding, selecting implementing agencies, defining an accreditation process for implementing agencies, developing fiduciary standards and environmental and social safeguards, and building a framework for the monitoring and evaluation of performance. Host Country . The agreement began the process of selecting a host country for the GCF, asked Parties to submit expressions of interest, and required a final decision for endorsement by the 18 th session of the COP (3/CP.17SSSS12-13). Management . The agreement tasked the board with establishing an independent secretariat to execute the day-to-day operations of the fund, to be in place no later than by the 19 th session of the COP (3/CP.17SSSS15, 19). Trustee . The agreement asked the board to open a transparent and competitive bidding process for the selection of a trustee, either to replace or continue the services of the World Bank, as interim trustee (3/CP.17SS16). Board Meetings . The agreement authorized the board to set up an interim secretariat immediately with the goal of convening the first board meeting. The first two board meetings were hosted by Switzerland and South Korea (3/CP.17SS24). The Governing Instrument. The agreement adopted the guidelines for the general operation of the fund. This included rules and procedures for the board, secretariat, and trustee, as well as initial discussions on fund structure, eligibility, access, allocation, standards, and evaluation (3/CP.17SSAnnex). The GCF Board formed in 2012 and began a series of meetings to decide on recommendations to bring before the UNFCCC at the 2012 COP in Doha, Qatar. Decisions on the GCF in the Doha negotiating text (CP.18) included the following: Host Country. The agreement endorsed the consensus decision of the GCF Board to select Songdo, Incheon, Republic of Korea as the host of the GCF. The GCF Board and the Republic of Korea were asked to conclude the legal and administrative arrangements for hosting the fund, and to ensure that juridical personality and legal capacity are conferred to the GCF (6/CP.18SSSS3, 4). Governing Instrument. The agreement recognized the Governing Instrument for the GCF, and asked the board to develop the final arrangements for the Instrument's provisions (7/CP.18). At the November 2013 conference in Warsaw, Poland, the GCF Board reported on the progress of the implementation of the Governing Instrument, including the work accomplished on the development of procedures, allocation of resources, securing of funding, establishment of a secretariat, selection of a trustee, and initiation of inter-fund linkages with other relevant thematic entities. Decisions on the GCF in the Warsaw negotiating text (CP.19) included the following: Secretariat . The agreement established the independent secretariat and named Ms. Hela Cheikhrouhou as the executive director (4/CP.19SS2). Guidance . The agreement adopted official guidance from the COP on policies, program priorities, and eligibility criteria for the fund to include (1) balancing resources for mitigation and adaptation, (2) pursuing country-driven approaches, and (3) confirming that all developing country Parties are eligible to receive resources (4/CP.19SS9). Arrangements . The agreement laid out the governing arrangements between the COP and the GCF, including provisions for guidance, reporting, cooperation, review, and evaluation (5/CP.19). Funding . The agreement called for "ambitious and timely contributions" by developed country Parties by COP 20 (4/CP.19SS13). The GCF was made operational in the summer of 2014, commencing its initial resources mobilization process. However, while the governing board, a host city, and the basic design of the fund have been agreed to by Parties, many structural aspects have yet to be clarified. They include the fund's administrative policies, best-practice fiduciary principles and standards, and environmental and social safeguards; financial risk management and investment framework; initial results areas, core performance indicators, and results management framework; procedures for accrediting national, regional, and international entities that will implement activities for the fund or intermediate finance to such entities; policies and procedures for the initial allocation of fund resources, including results-based approaches; initial proposal approval process, including criteria for program and project funding; and initial modalities for the operation of the fund's mitigation and adaptation windows, and the Private Sector Facility. The GCF was officially opened for capitalization at the United Nations Climate Summit in September 2014. A total of $2.3 billion was pledged initially to the fund, including the following (in approximate U.S.$): Germany $1 billion, France $1 billion, Korea $100 million, Switzerland $100 million, Denmark $70 million, Norway $33 million, Mexico $10 million, Luxemburg $6.8 million, Czech Republic $5.5 million. The Obama Administration announced a U.S. pledge of $3 billion over four years during the G-20 meetings in Australia on November 15, 2014. Japan pledged $1.5 billion at the meetings. The Administration's FY2016 budget requested $500 million for the fund. The GCF has confronted many challenges in design, scope, governance, and implementation, the details of which are still being finalized. The following sections provide a brief outline of some of the more significant issues. As currently conceived, the GCF is intended to operate at arm's length from the UNFCCC, with an independent board, trustee, and secretariat. The Governing Instrument states that the GCF is to be "accountable to and function under the guidance of the Conference of Parties" (3/CP.17SSA4) (i.e., similar in legal structure to the Global Environment Facility), as opposed to "accountable to and function under the guidance and authority of the Conference of Parties" (i.e., similar in legal structure to the Adaptation Fund). While subtle, the distinction carries import, and negotiators from China and the Group of 77 have--for the moment at least--kept the latter structure in conversation in an effort to ensure representation by all Parties of the UNFCCC. The majority of developed country Parties, however, opposes the Adaptation Fund model as inefficient and overly politicized for two key reasons: (1) the COP would have direct authority over the selection and release of all board and secretariat members, and (2) the COP would have final approval over all rules and guidelines proposed by the board. Keeping the fund independent from the COP has been a key negotiating point for the United States. Given the current language of the negotiating text (7/CP.18SS1), and the design of the board to carry equal representation between developed and developing country Parties, this issue may already be resolved. The role of the World Bank in the GCF has been, and continues to be, controversial. The Governing Instrument confirms the World Bank as the interim trustee, subject to review after three years of fund operation (3/CP.17SSA26). Most believe that once established, a subsequent shift in institutional arrangement is doubtful. Many developing countries hold the World Bank in a negative light, believing it to be non-transparent, overly bureaucratic, and reflecting solely the interests of higher-income countries, which command greater decision-making power by virtue of their greater financial contributions. Additionally, some Parties see the potential for conflicts of interest during the implementation phase of the fund, since the Bank (1) already operates a portfolio of Climate Investment Funds that might compete against the GCF for potential donor country contributions, and (2) has been asked to serve as support staff to aid in designing the operational procedures, project selection criteria, performance standards, and safeguard measures for the new fund. Despite these concerns, some Parties remain unconvinced that an adequate substitute exists, claiming that no other extant institution could undertake the proposed financial administration and fiduciary standards with the same level of confidence from the donors. The Cancun negotiating text is silent on sources, with no proposal for how finance would flow into the fund. The text simply "takes note" of "relevant reports on the financing needs and options for mobilization of resources to address the needs of developing country Parties with regard to climate change adaptation and mitigation, including the report of the High-level Advisory Group on Climate Change Finance [AGF]" (1/CP.16SS101). The Governing Instrument elaborates little on the sources of funding beyond two short statements: (1) the fund "would receive financial inputs from developed country Parties to the Convention," and (2) the fund "may also receive financial inputs from a variety of other sources, public and private, including alternative sources" (3/CP.17SSSSA29-A30). The Doha and Warsaw negotiating texts simply reiterate this language, calling for "ambitious and timely contributions by developed countries," and inviting "financial inputs from a variety of other sources, public and private, including alternative sources" (4/CP.19SSSS13, 15). Most see the faint mention of sources as unsurprising. The 2010 report by the AGF concluded that the goal of mobilizing adequate and predictable climate finance to developing countries on the order of $100 billion annually would be "challenging but feasible." Further, while it is acknowledged that adequate international finance would likely require a range of sources (including public finance, development bank instruments, carbon markets, and private capital), little unity exists among COP Parties as to the balance between public and private sources, developed and developing country participation in international carbon markets or tax schemes, and the political feasibility of other large-scale fund mobilizations. Several other multilateral fora have taken up the issue of climate finance sourcing, including the G-20 and the Major Economies Forum. However, the means by which the issue may be resolved during the fund's implementation is unclear. The Governing Instrument outlines several design aspects regarding the operation of the fund, including "complementarity, eligibility, structure, access modalities, and financial instruments" (3/CP.17SSSSA31-A56). Each category engenders debate among Parties, and the negotiating text leaves a number of issues open for consideration during implementation. Complementarity. While little has been decided regarding the eventual size and scope of the GCF, its formation is being viewed by many as a means through which to simplify the complex network of multilateral and bilateral funding mechanisms that currently provide climate change assistance to developing countries. Many early proponents of a global fund had envisioned that such an institution would play the role of a "fund of funds," or an "umbrella," under which to collect both the resources and the comparative advantages of the other mechanisms. As it currently stands, the Governing Instrument gives little indication that such an ambition is to be pursued by the GCF. It states, instead, that the fund would "operate in the context of appropriate arrangements between itself and other existing funds under the Convention, and between itself and other funds, entities, and channels of climate change financing outside the fund" (3/CP.17SSA33). Nevertheless, the fate of the other funds would be called into question by the establishment of the GCF. At present, the Adaptation Fund is the sanctioned U.N. mechanism in support of climate change assistance for adaptation actions. The Global Environment Facility is the sanctioned UNFCCC financial mechanism in support of mitigation actions. The World Bank's Climate Investment Funds were designed originally to sunset in 2012 at the presumed commencement of the new UNFCCC mechanism. It is possible that the eventual scope of the GCF may overshadow and/or replace these funds. Conversely, it is also possible that the GCF may be deemed inadequate to existing arrangements in the eyes of potential donors. Eligibility. The Governing Instrument text states that "all developing country Parties to the Convention are eligible to receive resources from the fund" (3/CP.17SSA35). Presumably this characterization would include middle-income countries like Brazil, India, South Africa, and China. The United States is on record as objecting to this arrangement. Structure. While the Copenhagen Accord specifies that the GCF would support activities related to "mitigation including REDD-plus, adaptation, capacity building, technology development and transfer" (2/CP.15SS10), the Cancun negotiating text dropped such references, opting instead to state that the GCF would use "thematic funding windows" (1/CP.16SS102). The Governing Instrument further unsettles the structure of the fund by stating that the GCF would "initially have windows for adaptation and mitigation"; but would likewise "ensure adequate resources for capacity-building and technology development and trade" as well as "consider the need for additional windows" (3/CP.17SSSSA37-A39). Further, the board is tasked with "balancing" the allocation of resources between adaptation and mitigation (3/CP.17SSA50). With present funding by existing financial institutions decidedly tilted toward mitigation actions, there is likely to be a strong expectation--by developing countries as well as certain civil society organizations--that adaptation actions receive a significant portion of support from the GCF. Currently, no allocation formula has been provided, nor has a definition of "balance." Access. Consideration of how countries would access funds from the GCF, and which agencies and organizations would be allowed to acquire funds to implement projects, remains an ongoing issue of debate. Currently, most multilateral financial assistance for climate change activities in developing countries is channeled through third-party implementing agencies (e.g., U.N. agencies, multilateral development banks, major nongovernmental organizations). The Governing Instrument invites international entities to provide services for the GCF; however, it emphasizes "direct access" modalities as a way to enhance recipient country ownership in the process (3/CP.17SSSSA45-48). Direct access has become a prominent, new arrangement in climate finance delivery, allowing the recipient country to access financial resources directly from the fund, and/or allowing it to assign an implementing agency of its own choosing. This operational freedom has been a rallying point for many developing country Parties. The modality is also supported by many developed country Parties as a means to secure broader competition and greater country ownership. Nevertheless, implementation of direct access arrangements may prove to be slow and difficult, because they would likely require the same stringent level of fiduciary standards, competitive procurement practices, and environmental and social safeguards demanded of existing third-party implementing agencies. The Governing Instrument places the burden of developing "an accreditation process for all implementing entities" on the board (3/CP.17SSA49). Instruments. As for the choice of instruments, the Governing Instrument states that financing would be provided "in the form of grants and concessional lending, and through other modalities, instruments or facilities as may be approved by the Board" (3/CP.17SSA54). Observers stress that climate finance can take a variety of forms; however, debate consistently arises between donor and recipient countries as to the appropriateness of debt-based instruments (i.e., loans) for humanitarian aid. While the general presumption is that climate finance in support of adaptation actions in developing countries should be provided on grant terms, this is less customary with regard to mitigation actions. Thus, many see it as important for the GCF to secure a good match between the type of finance and the object of financing, retaining sufficient funds to provide grants when necessary, as influenced by both the country and the project profile. The relationship of the GCF to other climate finance commitments by the United States can be outlined as follows: UNFCCC 2020 Pledges. The collective pledge by developed country Parties to the goal of mobilizing jointly $100 billion per year by 2020 is not tied directly to the GCF. The Cancun negotiating text makes clear that "funds provided to developing country Parties may come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources" (1/CP.16SS99). The GCF is one of many possible public and multilateral sources. While any financial assistance that is channeled through the GCF would likely be considered a part of the $100 billion goal, the entirety of the $100 billion goal is not expected to be provided solely by the GCF, and no estimation of the GCF's presumed share has been suggested officially. Many Parties, as well as the AGF report, have suggested that development bank instruments, carbon markets, and--especially--private capital would be critical to mobilizing assistance at the level pledged. Bilateral Aid. The GCF would not necessarily interfere with current or proposed bilateral climate change assistance to developing countries. The GCF would be another multilateral mechanism for climate change assistance that would exist alongside bilateral activities, much the way that the Global Environment Facility and the Climate Investment Funds currently do. U.S. allocations between and among bilateral and multilateral assistance channels would continue through authorized congressional appropriations. Other Multilateral Aid. The GCF Board has been tasked with determining the complementarity of the GCF with respect to other U.N. multilateral mechanisms. Thus, the negotiations may produce some alteration in the landscape of the multilateral choices provided by the UNFCCC. Development bank mechanisms such as the Climate Investment Funds are currently being reevaluated by their governing boards in light of the final implementation of the GCF. Presumably, choices would remain available to donor countries. U.S. allocations among multilateral assistance channels would remain based on congressional guidance and would continue through authorized congressional appropriations. Members of Congress hold mixed views about the value of international financial assistance to address climate change. While some Members are convinced that human-induced climate change is a high-priority risk that must be addressed through federal actions and international cooperation, others are not as convinced. Some are wary, as well, of international processes that could impose costs on the United States, redirect funds from domestic budget priorities, undermine national sovereignty, or lead to competitive advantages for other countries. Regardless of current views, the United States is a Party to the UNFCCC and has certain obligations under the treaty. The executive branch continues negotiations and implementation of the UNFCCC obligations, while committees of Congress engage in oversight (from home and at the international meetings), providing input to the executive branch formally and informally, and deciding program authorities and appropriations for these activities. As Congress considers potential authorization and/or appropriations for the GCF, it may raise concerns regarding the cost, purpose, direction, efficiency, and effectiveness of the UNFCCC and existing international financial institutions. These concerns may be weighed against the design characteristics of the GCF in an effort to assess its potential performance. Congress may then be required to determine the allocation of funds between bilateral and multilateral climate change assistance as well as among the variety of multilateral mechanisms. Congress may also wish to gauge and give guidance to the new fund's relationship with domestic industries and private sector investment, as well as the spillover effects of U.S. participation on technological innovation, humanitarian efforts, national security, and international leadership. Potential authorizations and appropriations for the GCF would rest with several committees, including the U.S. House of Representatives Committees on Foreign Affairs (various subcommittees); Financial Services (Subcommittee on International Monetary Policy and Trade); and Appropriations (Subcommittee on State, Foreign Operations, and Related Programs); and the U.S. Senate Committees on Foreign Relations (Subcommittee on International Development and Foreign Assistance, Economic Affairs, and International Environmental Protection); and Appropriations (Subcommittee on State, Foreign Operations, and Related Programs). Additional issues for Congress concerning the climate negotiations in general, and the GCF in particular, may include the means to establish a more desirable form of agreement (or lack thereof); the compatibility of any international agreement with U.S. domestic policies and laws; the adequacy of appropriations and fiscal incentives to achieve any commitments under the agreement; and any requirements for potential ratification and implementing legislation, should a formal treaty emerge from the negotiations.

Over the past several decades, the United States has delivered financial and technical assistance for climate change activities in the developing world through a variety of bilateral and multilateral programs. The United States and other industrialized countries committed to such assistance through the United Nations Framework Convention on Climate Change (UNFCCC, Treaty Number: 102-38, 1992), the Copenhagen Accord (2009), and the UNFCCC Cancun Agreements (2010), wherein the higher-income countries pledged jointly up to $30 billion in "fast start" climate financing for lower-income countries for the period 2010-2012, and a goal of mobilizing jointly $100 billion annually by 2020. The Cancun Agreements also proposed that the pledged funds are to be new, additional to previous flows, adequate, predictable, and sustained, and are to come from a wide variety of sources, both public and private, bilateral and multilateral, including alternative sources of finance. One potential mechanism for mobilizing a share of the proposed international climate financing is the UNFCCC Green Climate Fund (GCF), proposed during the 2009 Conference of Parties (COP) in Copenhagen, Denmark, accepted by Parties during the 2011 COP in Durban, South Africa, and made operational in the summer of 2014. The fund aims to assist developing countries in their efforts to combat climate change through the provision of grants and other concessional financing for mitigation and adaptation projects, programs, policies, and activities. The GCF is capitalized by contributions from donor countries and other sources, potentially including innovative mechanisms and the private sector. The GCF currently complements many of the existing multilateral climate change funds (e.g., the Global Environment Facility, the Climate Investment Funds, and the Adaptation Fund); however, as the official financial mechanism of the UNFCCC, some Parties believe that it may eventually replace or subsume the other funds. The GCF was made operational in the summer of 2014. Parties have pledged approximately $10 billion for the initial capitalization of the fund. The Obama Administration announced a pledge of $3 billion over four years during the G-20 meetings in Australia on November 15, 2014. The Administration's FY2016 budget requested $500 million for the fund. Notwithstanding these financial pledges, some operational details remain to be clarified. They include what role the GCF would play in providing sustained finance at scale, how it would fit into the existing development assistance and climate financing architecture, whether sources beyond public funding would successfully contribute to it, and how it would allocate and deliver assistance efficiently and effectively to developing countries. The U.S. Congress--through its role in authorizations, appropriations, and oversight--would have significant input on U.S. participation in the GCF. Congress regularly determines and gives guidance to the allocation of foreign aid between bilateral and multilateral assistance as well as among the variety of multilateral mechanisms. In the past, Congress has raised concerns regarding the cost, purpose, direction, efficiency, and effectiveness of the UNFCCC and existing international institutions of climate financing. Potential authorizations and appropriations for the GCF may rest with several committees, including the U.S. House of Representatives Committees on Foreign Affairs, Financial Services, and Appropriations, and the U.S. Senate Committees on Foreign Relations and Appropriations. Appropriations for foreign aid are generally provided through the U.S. Administration's State, Foreign Operations, and Related Programs 150 account.

Advertising has been--and continues to be--transformed as consumers spend more of their time using electronic devices, such as smartphones and tablet computers, to access digital content of many varieties. This shift has given rise to difficult and novel public policy issues. This report examines some of these issues in the context of the structural shifts that have reshaped the advertising industry over the past decade. Thirty years ago, consumers viewed an average of 560 ads per day. As advertising has spread from newspapers and television shows to gasoline pumps, cell phones, and bus stops, the exposure to advertising is almost certainly higher today. By one count, the average American consumer may be exposed to 3,000 commercial messages every day. Advertising pays for much of the content on traditional media and online platforms. It provides 84% of television networks' revenue, and until recently furnished 60%-80% of most daily newspapers' revenue. Advertising generates more than 80% of total revenue at Internet companies such as Google, Yahoo, and Facebook, and covers the cost of many of the free "apps" consumers download to increase the functionality of their smartphones and tablet computers. Compared with traditional advertising, digital advertising seems to have some significant advantages for advertisers. For instance, small businesses can now reach millions of potential customers at low cost. Smartphones, tablets, and other mobile devices give advertisers greater access to more consumers for more hours of the day. Companies can now directly tout their products online and better tailor their ads to consumer behavior using the wealth of information consumers generate online. Nevertheless, digital advertising is causing industry-wide disruptions. The proliferation of ad-supported websites, online video, and blogs has pushed down advertising rates for both online and conventional media markets. Media traditionally dependent on advertising are being forced to find new business models as advertising revenue streams decline. SNL Kagan, an industry research firm, pegged total national and local ad revenues at $219 billion in 2012, down 9% from 2008 (see Table 1 ). The television industry continues to capture the largest share of these revenues, 35% in 2012, and, according to SNL Kagan, its total advertising receipts have been rising even as advertisers' spending on direct mail, newspapers, radio, and magazines has fallen. Digital advertising--revenue from Internet and mobile sources--represents a rising fraction of ad revenue, growing to 16% in 2012 from 10% in 2008. Using the SNL Kagan estimate, total advertising revenue came to 1.4% of GDP in 2012. Most ad spending is undertaken directly by advertisers, but a significant portion passes through advertising agencies, which develop advertising campaigns and purchase display space or broadcast time. According to the U.S. Census Bureau, advertising and related services firms had revenue of $94.8 billion in 2012. This represents 44% of all ad spending, as measured by SNL Kagan. In 2008, by comparison, these firms' revenue of $89.2 billion came to 37% of total ad spending, as measured by SNL Kagan. The increasing role of ad agencies may reflect the fact that some types of advertising frequently placed directly by individuals or small firms, notably classified ads and real estate ads in newspapers, have migrated to online media, including websites such as Craigslist that may not charge for some ads. Advertising agencies range from small operations heavily reliant on freelance talent to multinational, multi-agency conglomerates. According to the Bureau of Labor Statistics (BLS), an estimated 18,700 business establishments made up the U.S. advertising industry in 2012. However, the five largest global advertising holding companies reportedly accounted for 73% of global ad agency revenue and more than half of U.S. agency revenue in 2012. Each of these large holding companies owns or controls a large number of separate agencies, which supply services from creative work and production to media planning, buying, and post-buy analysis (see Table 2 ). Omnicom and Publicis recently announced plans to merge in a deal that is still subject to approval by competition authorities, which are considering the extent to which the combined company would be able to exercise market power in the advertising market. A 2008 study found that the advertising and market services industry was not overly concentrated at the general level. However, market research firm IBIS World recently wrote, "Industry concentration has increased over time as more agencies merge, acquire, and operate on a global basis." Regulators will also need to take into account the increasing consolidation among sellers of advertising space and time, such as television stations and search engine owners, with which advertising agencies must bargain. The explosive growth of digital advertising raises questions about the role of advertising agencies in the future. Online advertising, as compared to traditional ad campaigns, is more data-driven, based on information drawn from users' Internet activity about consumer preferences, website popularity, and clicks per ad. Sellers of digital ads increasingly use mathematical formulas (algorithms) to determine price and placement of ads. It is possible that digital-driven disintermediation may ultimately allow some advertisers to place their ads directly rather than engaging advertising agencies to handle this work, reducing the ad agencies' importance. Employment at advertising firms is one indicator of demand for advertising services. Given the importance of personnel in service-related businesses such as advertising, it is not surprising that an ad agency's largest cost is its personnel. At a typical agency, wages and salaries can account for 55%-60% of expenses. At the end of 2012, the U.S. advertising industry employed 178,500 workers at an average annual pay of more than $90,000. Advertising employment peaked above 200,000 in 2000, but has fluctuated in a relatively narrow range over the past decade (see Figure 1 ). Approximately 37% of total advertising industry employment is in either New York or California, although every state has some employment directly related to advertising. U.S. advertising agencies traditionally charged clients a 15% commission based on the cost of media placement. Such pricing continued to be the industry standard even after courts in the 1950s ruled in favor of magazine and newspaper publishers' claims that the commission system limited their ability to directly bargain with advertisers. Industry compensation has changed significantly in recent decades, with most large national advertisers paying fixed fees to their ad agencies rather than commissions. In recent years, some advertising agencies have begun to focus on developing higher-growth non-advertising businesses, including market research, media planning, interactive media, and customer relationship management. They are also deriving a larger share of revenue from non-advertising sources such as special events promotion and public relations management. Revenue from these sources may be less cyclical than that from advertising. The most recent structural changes affecting advertising began around 1995, as consumers started to migrate from traditional media sources to online platforms. Online and mobile activities have accounted for steadily growing shares of consumers' media use at the expense of all other types of media (see Appendix ), and advertisers have been forced to rethink their marketing efforts in recognition of that trend. In 2012, Internet advertising revenues in the United States totaled $37 billion, a rise of 500% from $6 billion 10 years earlier (see Figure 2 ), according to the Interactive Advertising Bureau (IAB). eMarketer, a market research firm, projects that online ad spending may total $61 billion by 2017. Trillions of digital ads are served up annually. These ads are linked to many types of content and may be viewed on a wide variety of devices. According to Nielsen data, more than 209 million Americans were active online in January 2013. Facebook reported nearly 230 million daily desktop and mobile device views in the United States at the end of June 2013. Although television remains the dominant advertising choice, in 2011 spending on online advertising exceeded spending on print advertising for the first time. Due to the expanding online market, many print publications face increased financial stress. They have responded by attempting to increase their own online advertising revenues, although few print publications have managed to charge enough for online ads to make up for the loss of print revenue. In 2012, online ad revenue made up 15% of total newspaper advertising revenues, compared with 7% in 2007. Although online and traditional advertising are similar in many ways, there are important differences. A print newspaper may be the dominant source of information in its local market and therefore be able to charge advertisers a premium price, but on the Internet that same newspaper competes against hundreds or thousands of websites, bloggers, and Twitter users, and has less pricing power. The supply of online advertising opportunities is almost unlimited, and very few of the estimated 670 million websites on the Internet are essential buys for advertisers. The abundance of ad inventory means that online advertising rates can be substantially lower than ad rates in other media. A 2011 Federal Communications Commission report found that in May 2010 a typical online ad cost about $2.52 per 1,000 viewers, whereas the average cost per thousand viewers on primetime broadcast television networks was $19.74. Digital advertising can also be sold in other ways, including cost-per-click or by keyword purchase. Despite the multitude of websites and social media outlets, the online advertising market is a concentrated market. In 2012, the top 10 sellers of advertising space on websites accounted for more than 70% of online ad revenue, and the top 50 for nearly 90%, according to IAB. Real-time bidding systems (RTBs) like Google's DoubleClick or Facebook's Exchange let marketers buy and publishers sell advertising inventory through automated exchanges. RTBs account for a relatively small part of total online ad spending, at 13%, or $1.9 billion, in 2012, but market research firm IDC predicts that they may handle 27% of all U.S. online display advertising by 2016. Over time, automated ad exchanges may be used to sell other forms of advertising, such as digital radio and electronic screens on billboards and bus shelters. Some ad companies have started to build automated ad buying systems for television and radio. The regulatory and legal implications of RTBs are getting increased attention from lawmakers and regulators because these new systems raise issues about companies' data and consumer privacy disclosure practices in online and mobile environments. Concerns about anticompetitive business practices have also come into play, with attention to whether algorithms and restrictions on the use of certain data by advertisers could threaten competition and innovation. Measuring the effectiveness of advertising has long been a challenge. Newspaper and magazine circulation figures are compiled by the Alliance for Audited Media (AAM), formerly the Audit Bureau of Circulations. Nielsen, using consumer panels and electronic devices, collects television viewership numbers. Arbitron, using its proprietary Personal People Meter (PPM) technology, produces audience data on radio shows and stations. Figures from these groups are used to determine the prices of ads on traditional media outlets. In addition, many outlets commission studies to obtain demographic information, such as the age distribution of a magazine's readers, that may be of interest to advertisers. Advertisers and others have long groused about audience measurement techniques, and they have become even more skeptical as consumers increasingly view media in digital formats. For example, digital editions of newspapers (e.g., tablet or smartphone apps, PDF replicas, or e-reader editions) made up 19.3% of U.S. daily newspapers' total average circulation in March 2013. In many cases, newspaper and magazine subscribers have access to both paper and electronic publications, and meaningful ratings measurement must track readership across various formats. No commercially available national syndicated cross-platform audience measurement service exists today. Moreover, technology increasingly allows consumers to view digital content while bypassing advertisements, so audience data may not accurately provide the information of greatest interest to advertisers. In the digital world, advertisers can count the number of people who click on an ad, forward an e-mail, or view a video on their personal computer or mobile device. They can easily track ad impressions, click-throughs, unique visits, and time spent on each page. Cable and satellite digital set-top boxes can track users and deliver different ads for different audiences. Cell phone companies are also able to follow customers on mobile phones, which provide a wealth of data for advertisers. Companies like Google have built their business models upon gathering as much information as possible about consumer interests and behavior. The ability to monitor consumer response in this granular way has large financial consequences for both advertisers and sellers of advertising. According to the IAB, 66% of online ads sold in 2012 were priced on a performance basis such as cost-per-click, meaning that if the advertisement was ineffective in attracting consumer interest, the advertiser paid little or nothing. Questions about the accuracy of digital metrics abound. According to a 2009 study by comScore, only 16% of Internet users clicked on an ad and just 8% of Internet users accounted for 80% of all clicks; the company contends that ignoring Internet users who do not click on ads is unwise. Measurement of clicks can also be manipulated through click fraud, the practice of generating sham clicks to make ads look more popular and thereby increase website owners' revenues. One recent study reported that accidental or fraudulent clicks cost companies 40% of their mobile advertising budgets. Ratings measurement firms are competing to develop more finely tuned cross-platform measurement tools. Arbitron, which traditionally gathers data on radio listening patterns, now includes high-definition and streaming listening in its national broadcast ratings and is planning a service that will measure audio as a single medium, regardless of whether it is distributed over the air or via digital streaming. Nielsen plans to introduce services to measure television shows by their level of social media chatter; to measure video viewing over streaming services such as Netflix and Amazon and on TV-enabled game systems such as X-Box and PlayStation alongside traditional audience measurement; and to measure video streaming from each television network's own website. Last year, comScore, a competitor to Nielsen and Arbitron, introduced a service called vCE to track viewing on TV, web, and mobile platforms. Rentrak measures TV content viewing by audiences using scheduled interactive video-on-demand and digital video recorders. TRA, acquired by video recording company TiVo in 2012, attempts to correlate households' television TV viewing and purchasing habits. In September 2013, following a nine-month review process, the Federal Trade Commission (FTC) approved the acquisition of Arbitron, which holds about 90% of the market for radio audience measurement, by Nielsen, which has about 80% of the TV ratings industry market. The FTC's approval included one significant condition: it required Nielsen to make available for license certain Arbitron technology and related data to ensure continued competition in TV and radio audience measurement. The collection of large amounts of data for advertising purposes has proved controversial. Some Members of Congress and industry regulators have raised questions about what companies do with the data they collect, as consumers are often uninformed about how, where, and to what extent their information is used. They are also concerned about customer targeting and privacy safeguards attached to search and behavioral advertising and social media marketing. The Senate Commerce Committee and the FTC have both taken closer looks at industry practices. A difficult challenge for advertisers is how to find potential customers in the large, but scattered, digital world. Search advertising, in which ads are linked to particular search terms and are featured near the "natural" or "organic" search results on the search results page, barely existed a decade ago, but has emerged as one answer. In 2012, search ad revenue stood at around $17 billion, accounting for about 6% of the overall ad market and nearly half of the digital ad market (see Table 3 ). The search model, which includes contextual and behavioral targeting, is viewed as an effective means of matching relevant information with user interests, helping advertisers reach potential customers at the moment they might be considering the purchase of an automobile or a vacation trip. Advertisers generally pay only if a consumer clicks on an ad. An online advertiser can easily track users who navigate to its website when they search for certain products or services. Once the user has clicked on an ad associated with a particular search term, the advertiser can use its internal server logs to trace how the individual behaves. The importance of search as an advertising medium has generated antitrust concerns. In some European countries, Google has a market share of more than 90% of all Internet searches. In November 2010, the European Commission began an investigation of whether Google "has abused a dominant position in online search, in violation of European Union rules (Article 102 TFEU)." The investigation responded to complaints by publishers and competitors, such as online map companies, about unfavorable treatment of their services in Google's unpaid and sponsored search results, as well as alleged preferential treatment of Google's own services. The European Commission's investigation may well raise new issues, such as whether a search provider's secret algorithms can be anticompetitive when used for certain purposes. Although Google's ad practices have angered privacy advocates and attracted the attention of antitrust regulators in the United States as well, the FTC closed an investigation into Google's business practices after finding that it had not manipulated search results. Ad networks, or ad brokers--reportedly numbering more than 300 companies--pool hundreds or even thousands of web pages together to facilitate advertising across the web and many other digital platforms (e.g., RSS feeds, blogs, and e-mails). Such networks deliver ads from central computer servers that can engage in targeting, tracking, and reporting of impressions. Online publishers rely on ad networks such as Google Ad Network, Casale Media Network, ValueClick Networks, and Yahoo!SearchMarketing to sell inventory that they have not succeeded in selling directly. In some cases, website owners use networks as a substitute for direct selling. Ad networks are also an important sales tool for small web ventures that have limited resources to do their own marketing. More recently, the hundreds of ad networks have given rise to a new kind of ad inventory consolidator, the ad exchange, which matches ad buyers with ad sellers hoping to fill excess inventory. Some established companies say online advertising networks and exchanges affect prices for all ad-dependent companies because they can buy up blocks of residual or less attractive ads and release them on the market at fire-sale prices, in some cases for as little as 5%-10% of what the publisher might charge for the exact same ad space on a direct buy from an ad agency. The Online Publishers Association, a coalition of media and entertainment companies with a digital presence such as the Wall Street Journal , New York Times , and ESPN.com , released a study in August 2009 arguing that ads sold via brokers were less effective than ads sold directly on their websites--for which they can charge higher prices. But many prominent media companies use ad networks to sell at least part of their own inventory that they cannot sell directly. As ad networks and ad exchanges proliferate, lawmakers have started to focus on how they use data targeting and how they track behavioral activity. The White House, IAB, and leading ad networks, including Google, Yahoo, and Microsoft, recently agreed to self-regulatory guidelines and best practices whereby they agree to prohibit websites that engage in copyright piracy or the sale of counterfeit goods from participating in an ad network's advertising program. Advertisers have had to change their strategies quickly as digital consumers have changed the way they spend their time. The digital marketplace includes a variety of platforms: Mobile . More than 9 in 10 U.S. adults now own a mobile phone. As ownership of smartphones has increased, advertising on mobile phones has grown at a torrid pace, with revenues rising from $251 million in 2007 to $4.75 billion in 2012. By 2017, revenues could reach $27 billion, according to eMarketer. One challenge is that advertisers reportedly pay less for these ads than other online ads because consumers are less likely to make a purchase on their phones, perhaps due to the smaller screen size of mobile devices. Social networks . Two-thirds of online adults in the United States use social networking sites, including networking tools such as Facebook and Twitter; social sites such as Reddit, Digg, and propeller; photo and video sharing sites such as Flickr and You Tube; and social bookmarking sites such as Delicious. This segment accounts for nearly 20% of total time that U.S. adults spend on personal computers and 30% of total time online via mobile devices. Social networking sites typically garner most of their revenues through sale of advertising space. An advantage of social media advertising is that it allows advertisers to target users' demographic information. Advertisers, however, must be aware that social network members may be less inclined to accept advertising based on their personal data than visitors to other types of websites. According to Nielsen's 2012 Social Media Report, a third of users are annoyed by ads on social networks. Gaming . More than half of U.S. households own a dedicated game console, according to the Entertainment Software Association (ESA). The industry trade group says that casual, social games are the most frequently played online games, followed by action, sports, strategy, and role-playing games. Advertisers are trying to reach these consumers by running ads before digital games on online sites or embedding their ads into the games. Ad revenues from mobile gaming were reportedly around $200 million in 2012. Digital Video . Six out of seven U.S. consumers reported watching video content over the Internet in 2012, according to a 2013 survey by Accenture. After initially struggling to figure out how to sell ads against consumer-generated content, advertisers have become comfortable with the medium. Another advertising strategy associated with video is viral ads--videos and other promotions that gain an audience through online word of mouth. eMarketer recently projected U.S. spending on digital video ads to be $4 billion in 2013, doubling to $8 billion by 2016. Video ads generally sell for higher rates than banner ads. By browsing the web, blogging, joining social networks, and playing online games, consumers produce a large quantity of personal data. One way in which advertisers and marketing firms may use this information is to deliver higher-value ads targeted at consumers with identifiable interests. The ever-growing trails of personal data being collected by commercial enterprises have raised concern among privacy advocates, who have urged legislation to give consumers greater control over what information websites collect and how that information is used. Website owners and the advertising industry, on the other hand, worry that tougher privacy standards could make it more difficult to serve up targeted ads, harming one of the more lucrative aspects of online advertising. Contextual and behavioral advertising are two ways to place relevant information in front of a potential customer. The general idea behind contextual advertising is to generate ads expected to be of interest to an Internet user due to that user's recent online activity. Because contextual advertising involves little or no data storage beyond the current online session, it raises few privacy concerns. Behavioral ads, in contrast, use past browsing behavior to target ads. A company collects information about websites and specific pages a consumer visits and uses that viewing history to make guesses on the consumer's interests; a consumer with a history of visiting cat forums, for example, might be likely to see ads for kitty litter. Such ads can command prices more than twice those of other forms of online advertising. The main mechanism for following consumers' online activity is tracking cookies, small text files that can store data. By design, cookies are largely invisible to consumers and are encrypted to be unintelligible to any user wanting to know what information they contain. Behavioral tracking and targeting can create highly detailed user profiles by combining a user's history of online activity with data derived offline. Companies that collect and sell data gathered by cookies claim the data do not identify users by name, and that their activity is adequately disclosed in privacy policies. Separately, mobile devices use location-based services to track consumers' whereabouts. This allows advertisers to serve ads related to the user's current location. Device users may be able to turn off locational tracking, although this may reduce the functionality of their devices. A 2012 survey by the Pew Research Center found that 68% of Americans did not like having their online behavior tracked and analyzed. Among the concerns are that tracking can be used to take advantage of vulnerable consumers, particularly children, and that the information collected may be used inappropriately or might reveal the identity of a person. A coalition of consumer groups has called for mandatory constraints on behavioral advertising. Behavioral tracking remains largely unregulated in the United States, although some researchers point to a strong domestic regime of corporate "privacy on the ground." U.S. courts have ruled it is legal to deploy "first-party" cookies, or information collected by a company or an online publisher for its own use. In contrast, more complex "third party" advertising cookies, placed by a party other than the site the user is currently visiting, raise questions about intrusive monitoring. According to an analysis by Keynote Systems, which describes itself as an Internet and mobile cloud testing and monitoring company, 86% of 269 top websites across four industries placed one or more third-party tracking cookies on their visitors. Common third-party advertising trackers include Google Adsense, DoubleClick, Quantcast, OpenX, Google AdWords Conversion, and Amazon Associates. The growing use and power of tracking technology have raised regulatory concerns. The FTC has already taken enforcement actions related to third-party web tracking against several companies, including Facebook and Google. In March 2012, the FTC released a report recommending a "Do-Not-Track" registry to allow consumers to opt out of online tracking. It noted that while many companies treat consumer information carefully, "some appear to treat it in an irresponsible or even reckless manner." Several web browsers have adopted "do not track" features, but some privacy experts question their effectiveness. When the feature is on--some browsers require the user to turn it on rather than making it the default setting--the browser sends a signal to websites that a user does not want to be tracked, so that any cookies placed by a website should collect only the bare minimum amount of information required to provide service. As of April 2013, Google reported that approximately 17% of its U.S. viewers using the Firefox browser had turned the "do not track" setting on. In the United States, a consortium of ad trade groups created the Digital Advertising Alliance's (DAA's) turquoise Advertising Option Icon in response to pressure from the FTC. Depicted in the adjacent box, the DAA icon may show up in or near online ads or on web pages where data are collected and used for behavioral advertising. After clicking on the icon, users find a disclosure statement on data collection, use practices associated with the ad, and a voluntary opt-out mechanism. Proponents view the DAA Icon as a means of assisting consumers with managing their online tracking profiles, although skeptics maintain Ad Choice does not go far enough to inform people about what data are being collected from them and how they are being used. An international body, the World Wide Web Consortium (W3C), is attempting to come up with tracking standards that might apply worldwide. W3C is made up of computer scientists, consumer advocates, and dozens of companies like Microsoft and Google. The group has not yet reached consensus on the technology or policy components related to consumer web tracking. Congress has been involved in regulating advertising since at least 1914, when the Federal Trade Commission Act made unlawful "the dissemination or the causing to be disseminated of any false advertisement" that might affect commerce." Among the motivations for federal legislation regarding advertising over the years have been ensuring fair competition; shielding consumers from unfair or misleading messages; limiting exposure of children to certain types of advertisements; and restricting promotion of products deemed morally or physically harmful. More recently, Congress, regulators, and the courts have turned their attention to digital advertising. Several federal agencies are involved: The FTC, the principal federal agency responsible for regulating public advertisements in all media, is charged with protecting consumers from claims that are false, deceptive, or unfair. Its authority covers both online and traditional advertising. The FTC Bureau of Consumer Protection enforces rules regarding online consumer privacy. In recent years, the FTC has investigated several companies, including Sears, Myspace, and Google, for their online behavioral advertising practices. The Food and Drug Administration (FDA) enforces the Federal Food Drug and Cosmetic Act (P.L. 75-717), which regulates food package labeling and health claims and consumer prescription drug advertising. Its recent efforts include formulating policy on the marketing of prescription drugs and restricted medical devices through social media tools. The Federal Communications Commission (FCC) regulates various issues affecting advertising on radio, television, telephone, satellite and cable television, and the Internet. The FCC is taking a fresh look at children and digital media. The FCC also adopted a rule in 2012 that for the first time requires affiliates of the four major networks in the top 50 TV markets to post political ad buying information online. All other stations will have to comply by July 1, 2014. The Consumer Financial Protection Bureau (CFPB), an independent agency created in 2011, oversees advertising of financial products to consumers. Its Mortgage Acts and Practices Advertising rule, which took effect in August 2011, prohibits mortgage lenders and brokers from making misleading claims about mortgage products. The CFPB has launched formal investigations into six companies that it believes have violated the MAP Rule. The Federal Election Commission (FEC) oversees political ads. A patchwork of state regulations also affects online advertising. Every state has consumer protection laws applying to ads running in that state, most often governed through state regulatory authorities and overseen by the state attorney general. An increasing number of states have passed laws affecting digital advertising. At least nine states, including California, Maryland, and New York, have introduced legislation on consumer or child online privacy. For instance, California requires commercial websites to post a privacy policy to any website accessible by California residents. California also enacted the so-called "eraser law" that, beginning on January 1, 2015, allows minors to remove publicly posted content on social media sites such as Facebook and Twitter and prohibits online advertising of harmful products directed at minors, including the sale of firearms, alcohol, and tobacco. The advertising industry has its own self-regulatory system organized through the Advertising Self-Regulatory Council (ASRC), formerly the National Advertising Review Council. The ASRC aims to develop standards of "truth and accuracy" for national advertisers through a compliance system that includes recommendations for corrective actions and an internal appeals process. The ASRC also sets policies for the National Advertising Division of the Council of Better Business Bureaus and the Children's Advertising Review Union. These self-regulatory bodies look into specific complaints regarding possibly inaccurate product claims and more general questions about whether certain advertising is appropriate, particularly for children. Other initiatives promote healthier food and beverage choices in advertising targeted at children; aim to improve consumer confidence in electronic advertising; establish principles for online behavioral advertising; and provide guidance for the mobile environment. The IAB, founded in 1996, develops voluntary standards for online businesses and advertisers. The IAB is a coalition of more than 500 media and technology companies that sell nearly 90% of all U.S. online advertising. One of the IAB's self-described goals is to fend off intrusive legislation. In that vein, it worked with other advertising organizations to craft voluntary guidelines for behavioral advertising, which were released in 2009. The IAB also has set guidelines for advertising in social media and on mobile platforms. It has tried to standardize online advertising, issuing definitions for terms like "click" and "impression" as well as ad sizes and use of techniques such as pop-up ads. Even though many U.S. consumers are concerned about online privacy and many actively avoid companies they do not trust, only 38% of consumers claim to know how to limit information collected on them by a website, according to Pew Research. Increasingly, regulators in the United States and Europe are scrutinizing the use and power of tracking technology. The European Union's approach to protecting privacy includes comprehensive national laws, prohibitions against collection of data without a consumer's consent (the Cookie Directive), and requirements that companies that process data register the activities with government authorities. So far, the U.S. approach has been more ad hoc and industry-based. These differences may raise significant compliance challenges for U.S. companies doing business in Europe--including those transacting with European nationals solely through the Internet without a physical presence in Europe. The FTC recommended a Do Not Track framework in 2012 and provided recommendations on privacy protections for mobile services in 2013. To keep up with changing technology, the FTC amended its Children's Online Privacy Protection (COPPA) Rule in 2012, strengthening its privacy protections to give greater control to parents over what information is collected online from children under 13. Among the more significant changes, which took effect on July 1, 2013, the revised COPPA rule expanded the definition of the term "personal information" that operators of commercial websites and online services, including mobile apps, can collect from children and revised how companies obtain parental consent. A 2012 FTC report discussed how mobile apps affect the privacy of children, which some observers believe could be a prelude to proposed regulation. Besides privacy, the FTC updated its Dot.com disclosures for online advertising to give businesses examples and direction on how to avoid unfair or deceptive business practices in their online ads. In December 2010, the Department of Commerce Internet Policy Task Force released a green paper on commercial data privacy issues that recommended, for instance, the establishment of a Privacy Policy Office and a commercial data privacy framework for businesses. That report did not endorse any privacy initiatives. Building on the Department of Commerce's work, the White House released its consumer data privacy framework in 2012, which also considers the issue of third-party personal data collection and how companies deliver targeted ads to consumers. In the 113 th Congress, Do Not Track legislation was reintroduced by Senators Jay Rockefeller and Richard Blumenthal. The Do-Not-Track Online Act of 2013 ( S. 418 ) was first introduced in 2011. If the bill is passed in its present form, companies would be required to honor user requests not to have online activities tracked, much the same as provided by the original 2011 bill. In April 2013, the Senate Commerce Committee held a hearing on the progress of industry self-regulation of online behavioral advertising. Senators Ron Wyden and Mark Kirk reintroduced geolocation privacy legislation ( S. 639 ). That measure would prohibit the interception, disclosure, and use of geolocation information (information concerning the location of a wireless device) pertaining to another person. In the House of Representatives, the Online Communications and Geolocation Protection Act ( H.R. 983 ), reintroduced by Representatives Zoe Lofgren, Ted Poe, and Suzan DelBene, contains many of the same provisions. Representative Joe Barton, who sponsored the Do Not Track Kids Act of 2011 ( H.R. 1895 ) in the 112 th Congress with then Representative Edward Markey, has said he plans to reintroduce the bill in the 113 th Congress. That act would prohibit the collection and use of minors' information for targeted marketing and strengthen privacy protection for children through, for instance, creating an eraser button for parents to delete information that companies gather about their children.

The United States is the world's largest advertising market. According to one estimate, domestic advertising revenue totaled $219 billion in 2012, accounting for about 1% of U.S. gross domestic product (GDP). Almost every major medium of information, including the press, entertainment, and online services, depends on advertising revenue. Advertising accounts for 60%-80% of total revenue at many newspapers and magazines and for most revenue at search engines and social networking sites. Television still remains the main choice for advertisers, with ad revenue at almost $76 billion in 2012. However, spurred by the growth of paid search, online video, social networks, and mobile devices, advertising is moving to online platforms. Digital advertising revenue is estimated to have reached $36 billion, or 16% of total ad revenue, in 2012. Companies can more easily track and measure consumer behavior online, which allows them to develop detailed profiles of their customers. Some Members of Congress have raised concerns about the business practices of online advertisers, particularly since their activities are largely unregulated in the United States. Digital publishers favor targeted consumer tracking because it allows them to provide free or low-cost ad-supported content. Without it, they argue, their ad-supported businesses could be harmed or possibly destroyed. Yet more than two-thirds of Americans do not like having their online behavior tracked and analyzed, according to a recent Pew Research Survey. Privacy and consumer advocates argue for more expansive federal regulations to protect consumers' online privacy. Because of these concerns, recent Congresses, including the 113th, have focused on issues relating to digital advertising. They have held hearings on data privacy and proposed legislation including "Do Not Track" to give consumers the online equivalent of a "Do Not Call" option. In addition, lawmakers have proposed legislation to protect consumers from unlawful geolocation tracking of mobile devices. Congress is also looking at search advertising (where companies sell ads around consumer-initiated search results on web browsers) and fraudulent marketing over social networks. The growing use of online and mobile tracking has raised regulatory concerns. The Federal Trade Commission (FTC) has published updated "Dot Com" disclosures for online ads; recommended a voluntary Do Not Track (DNT) function; and released new guidance on mobile advertising. The Food and Drug Administration (FDA) is studying pharmaceutical marketing in social media, with guidance required by June 2014. Since 2012, the Obama Administration and the FTC have introduced new privacy frameworks. Other countries are debating, and some already have and others might adopt, new privacy laws. In particular, digital advertising in the European market is becoming more challenging as European lawmakers consider much stricter DNT rules, raising ever greater compliance hurdles for U.S. businesses. A patchwork of state regulations, including California's eraser law, also affects online advertising.

The Experimental Program to Stimulate Competitive Research (EPSCoR) of the National Science Foundation (NSF) was authorized by Congress in 1978, partly in response to concerns from Congress and from some of those in academia and the scientific community about the geographic distribution of federal research and development (R&D) funds. Additional concerns resulted from the practice of congressional directed spending --allocating funds for specific institutions or research projects. Historical data revealed that there was a concentration of federal R&D funds in large and wealthy states and universities, and that the continuation of such funding patterns might ensure a dichotomy between the "haves" and "have-nots." As designed, EPSCoR is to help achieve broader geographical distribution of R&D support by improving the research infrastructure of those states that historically have received limited federal R&D funds. While these states fall outside of the top 10 states in receipt of federal R&D support, according to the NSF, they have "demonstrated a commitment to improve the quality of science and engineering research and education conducted at their universities and colleges." The premise of the program is that "academic research activity underpins every state's overall competitiveness." James Savage, writing in Funding Science in America , describes EPSCoR's creation as a type of "affirmative action program designed to aid less successful states and their universities in their competition for federal research funds." W. Henry Lambright, Director, Center for Environmental Policy and Administration, Syracuse University, stated that "EPSCoR was not intended as an entitlement, but rather as a catalyst." Lambright noted further that EPSCoR had a "troubled birth," having been rejected in its first vote by the National Science Board, the policy-making arm of NSF. In order to win approval, the program had to be modified, expressing values consistent with those of the NSF: "... merit, with the emphasis on an institution, the university." EPSCoR began in 1979 with five states and funding of approximately $1.0 million. Currently, EPSCoR operates in 29 jurisdictions, including 27 states and the Commonwealth of Puerto Rico and the U.S. Virgin Islands. (See Figure 1 for the participating jurisdictions.) To 2006, the NSF had invested approximately $920.0 million in EPSCoR programs and activities. Currently, EPSCoR jurisdictions receive approximately 12% of all NSF research funding. When established, it operated solely in the NSF. Congressional action led to its expansion in the mid-1980s and early 1990s, and by 1998, seven other agencies had established EPSCoR or EPSCoR-like programs. This report is limited to a discussion of EPSCoR programs at the NSF. Arden L. Bement, Jr., Former Director, NSF, stated that "EPSCoR is based on the premise that no one region and no one group of institutions has a corner on the market of good ideas, smart people, or outstanding researchers." EPSCoR is a joint program of NSF and selected states and territories. Its goal is to build competitive science by developing science and technology (S&T) resources through partnerships involving state universities, industry, government, and the federal R&D enterprise. The program is a partnership between the NSF and a state to improve the R&D competitiveness through the state's academic S&T infrastructure. The mission of EPSCoR is to raise the capability of a research institution or to assist in making a less-competitive institution more research intensive. Eventually, EPSCoR supporters hope those states receiving limited federal support would gain some level of equity in competing for federal and private sector funds through the regular grant system. The goal of the program as described by NSF is to Provide strategic programs and opportunities for EPSCoR participants that stimulate sustainable improvements in their R&D capacity and competitiveness, and to advance science and engineering capabilities in EPSCoR jurisdictions for discovery, innovation and overall knowledge-based jurisdictions. EPSCoR achieves its objectives by: (1) catalyzing key research themes and related activities within and among EPSCoR jurisdictions that empower knowledge generation, dissemination and application; (2) activating effective jurisdictional and regional collaborations among academic, government and private sector stakeholders that advance scientific research, promote innovation and provide societal benefits; (3) broadening participation in science and engineering by institutions, organizations and people within and among EPSCoR jurisdictions; and (4) using EPSCoR for development, implementation and evaluation of future programmatic experiments that motivate positive change and progression. In a prepared statement before the NSF EPSCoR 21 st Annual Conference, Arden Bement stated that "Over the past 30 years, EPSCoR has evolved into a Program of Experimentation. It is a federal-state partnership that continues to show how to create and sustain robust infrastructures that support world-class research and education in science and engineering." EPSCoR, while designed as a sheltered program, has been integrated into the performance of all NSF directorates. Its grants are awarded on a competitive peer- or merit-reviewed basis. Proposals submitted vary, and come from academic, state, profit and nonprofit organizations, and individuals. Also, support is provided to cooperative programs among institutions in different EPSCoR states, or between a state's research institution and a primarily undergraduate institution. All principal investigators of NSF EPSCoR projects are required to be associated with research institutions, organizations, or agencies within the participating state. In addition, all of the projects must be designed to contribute to the research competitiveness of the colleges and universities in the particular state. EPSCoR funding was not intended to replace existing federal, state, institutional, or private sector support, but to "... add specific value to the state's academic infrastructure not generally available through other funding sources." Responsibility for operating the program rests within the individual states. A state is required to provide matching funds. An EPSCoR governing committee is established in each participating state to identify opportunities for EPSCoR awards. States devise strategies that allow them to adapt to vastly different federal funding environments. The programs are reviewed periodically by external panels and assessments are performed by independent organizations. Data reveal that the 29 EPSCoR jurisdictions account for more than 20% of the U.S. population, about 25% of research institutions, and an estimated 16% of employed scientific and technical personnel. As a whole, these 29 jurisdictions receive approximately 13.6% of all NSF R&D funding. In FY2010, NSF provided an estimated $145.4 million for EPSCoR activities, an increase of $12.4 million (9.3%) above the FY2009 level. (See Table 1 for funding levels of previous years.) Funding was provided through three complementary investment strategies--research infrastructure improvement grants, co-funding, and outreach and workshops. NSF's current portfolio for EPSCoR includes three complementary investment strategies--research infrastructure improvement (RII) grants, co-funding of disciplinary and multidisciplinary research, and outreach and workshops. RII grants support S&T infrastructure improvements that have been designated by a governing committee in the EPSCoR state as essential to the state's future R&D competitiveness. RII grants are of two types--RII Track 1 and RII Track 2. RII Track 1 grants are made to individual jurisdictions and are awarded up to $15.0 million for a period of up to 60 months. RII Track 2 grants are made to consortia of EPSCoR jurisdictions and are limited to a maximum of $2.0 million for up to 36 months. Examples of RII grants include startup funding for faculty research, faculty exchange projects with major research centers, development of nationally competitive high-performance computing capabilities, acquisition of state-of-the-art research instrumentation that is unavailable through the NSF's regular grant system, creation of graduate research training groups that encourage multidisciplinary experiences, developing linkages between industry and national laboratories, and development of programs to expand minority participation in science, engineering, mathematics, and technical disciplines. RII grants are the principal focus of the EPSCoR program. NSF funding for EPSCoR RII grants in the FY2012 appropriations is estimated at $110.0 million, a $5.3 million decrease from the FY2011 level. The Administration's request for RII in the FY2013 request is $116.2 million. The co-funded grant mechanism encourages EPSCoR researchers and institutions to move into the mainstream of federal and private sector R&D support. Co-funding is an internal, cross-directorate, NSF funding mechanism. Co-funding activities are applicable in the various directorates, the Office of Polar Programs, the Office of International Science and Engineering, the Office of Cyberinfrastructure, and the Office of Integrative Activities. Co-funding allows states to receive more support than would have available under EPSCoR alone. Proposals supported are in areas that have been identified by the state's EPSCoR governing committee as critical to the future R&D competitiveness of the state or jurisdiction, and include, among other things, individual investigator-initiated research proposals and R&D encompassed by the various crosscutting and interdisciplinary programs in NSF. To receive support for co-funding, a grant proposal must be, among other things, rated at or near the same level as the highly rated grants in the regular grant process. The FY2012 appropriation for co-funding is $39.4 million, a slight increase over the FY2011 level of $38.9 million. The Administration requests $40.0 million in FY2013 for co-funding. The outreach and workshops funding mechanism of EPSCoR provides support for NSF program directors and relevant personnel to visit participating researchers in EPSCoR states and to further familiarize the states and researchers with NSF policies, practices, and programs. Also, it allows agency personnel to become more cognizant of the availability of resources within the states and their institutions. Outreach and workshops visits take two forms--those initiated by a host of an EPSCoR state or jurisdiction, and those initiated by NSF program officers. The visits may result in colloquia or seminars. It is NSF's contention that the contact provided by outreach visits will lead to an increase in both the quality and quantity of grant proposals submitted by participating states. Funding for the outreach strategy in the FY2012 appropriation is estimated at $1.5 million, slightly above the $1.2 million enacted in FY2011. It is anticipated that funding in FY2012 will allow for expansion of activities that build regional and jurisdictional research infrastructure. The budget request for outreach and workshops in FY2013 is $2.0 million. In 1994, an evaluation of the EPSCoR program was conducted by the COSMOS Corporation. The evaluation, released in May 1999, covered the period 1980-1994, and was designed to, among other things, determine whether participating states and their institutions had increased their share of federal R&D funds and to identify the EPSCoR program strategies that led to improvement of the states' and institutions' research competitiveness. The evaluation found that states' R&D competitiveness did improve and that EPSCoR had contributed to this competitiveness. The report stated that Based on the observed changes in federal and NSF shares, it can be concluded that the EPSCoR states' share of R&D funding did increase relative to the shares of the other states. To this extent, EPSCoR was associated with a lessening of the undue geographic concentration of R&D in the United States. Although the changes were small in absolute terms, this was a notable accomplishment in an era when research universities in non-EPSCoR states also were thriving and upgrading substantially. The report noted that NSF EPSCoR had facilitated the development of partnerships and linkages among institutions, state and federal government, and the private sector. It also revealed that while no state had graduated from EPSCoR (no longer receiving EPSCoR support), many EPSCoR research clusters had become fully competitive and no longer sought EPSCoR resources. The evaluators determined that for colleges and universities in EPSCoR states, the cluster strategy may have been a more effective approach to improving research capability than that of supporting individual researchers or single research projects, a strategy used in the early years of EPSCoR. An August 2006 report, EPSCoR 2020: Expanding State Participation in Research in the 21 st Century--A New Vision for the Experimental Program to Stimulate Competitive Research (EPSCoR) , found that while some participating states and jurisdictions had developed S&T capabilities that address national issues, they needed to progress at a faster pace in order to benefit more fully in a national research agenda. The report stated that The task now is to accelerate the positive trends in building research infrastructure and capacity in the states, and to incorporate the expertise and capabilities of these states into the larger national research agenda. As we move into a time of doubling the federal commitment to basic research, it is particularly critical and appropriate to make a new commitment to the EPSCoR states that have been left behind in the S&T community... . It is imperative that all of NSF's science, engineering, and education programs adopt the concept of broadening geographical and cultural participation in NSF activities as part of their objectives. Programmatic planning should consider how best to include all states and their research institutions as potentially important S&T resources. The workshop that generated this report proposed that a more flexible RII grant program should be instituted. The position of the workshop participants was that since the states were heterogeneous, a "one-size program" should not be applied to the then 27 different jurisdictions. Rather, the individual needs of the states should be a factor in determining the most effective strategy for infrastructure improvement. The current award structure is viewed as being no longer adequate for some jurisdictions to achieve a higher level of competitive science in some areas of research. It was proposed that RII grants be awarded for a period of up to five years, in the amount of $3.0 million-$5.0 million per year, per state or jurisdiction. The longer period of time for the grant would enable states to better implement their strategic plans. The increased level of funding would be related to the size of the jurisdiction and the extent of the "S&T transformative challenge." Another suggestion from the workshop was to place the EPSCoR program in NSF where its cross-directorate interactions would be maximized and integrated into all of the cutting edge initiatives of the agency. The FY2008 budget request for NSF did transfer the EPSCoR program from the Education and Human Resources Directorate to the Integrative Activities in the Research and Related Activities account. The FY2008 budget submission stated that "The relocation will allow the EPSCoR program greater leverage for improving the research infrastructure, planning complex agendas, and developing scientific and engineering talent for the 21 st century." An additional recommendation of the workshop was for EPSCoR states and jurisdictions to become a "test bed" for new initiatives. The report noted that because EPSCoR has matured as a program, it should expand its research capacity by developing expertise in areas of national importance, such as homeland security and national defense, cyberinfrastructure, environmental observatories, coastal and ocean issues, and energy expenditures. With the proposed flexibility to the RII grant mechanism, the participating states and jurisdictions could pursue multiple strategies, such as support for transformative research and innovation that has been outlined in NSF's strategic plan. The workshop participants maintained that "Developing expertise in topics of national importance will enhance success of proposals in other competitions." At the beginning of the EPSCoR program, some questioned the length of time required for a state to improve its research infrastructure. It was suggested to be five years, but that proved to be "... unrealistic, both substantively and politically." Questions remain concerning the length of time states should receive EPSCoR support. There are those in the scientific community who believe that some states and their institutions should assume more responsibility for building their research infrastructure and become less dependent on EPSCoR funds. They argue that some researchers and states have become comfortable with EPSCoR funding and are not being aggressive in graduating from the program. It continues to be called an experimental program after three decades, and no state has yet graduated from the EPSCoR program. The issue of graduation from the program has generated considerable Congressional interest. In August 2005, the NSF's Committee of Visitors (COV) released a review of the EPSCoR program for the period FY2000 through FY2004. One of the issues in the August 2005 review was centered on determining when states would become independent of EPSCoR resources. Questions included What initiatives are there to promote graduation from EPSCoR and mainstreaming in the regular grant making process? What level of progress must a state achieve to justify that it is no longer eligible for EPSCoR resources? The COV admitted that graduation/progression from the EPSCoR program is a "challenging" issue and has been debated from the beginning of the program within NSF and among the various stakeholders and participating states and jurisdictions. The review determined that it has become necessary to revisit what it means to "graduate" from the program. Because of the importance in developing a mechanism or measure for graduation from the program, the COV proposed the creation of a dedicated EPSCoR Advisory Committee (external) that would make recommendations for both eligibility for and graduation from EPSCoR. The report stated that Clearly, a fixed definition of graduation would be a moving target, especially in an environment where jurisdictions are still being added to the EPSCoR family. The current Office Head has articulated a vision of "programmatic graduation/progression," which necessarily includes the evolution of the EPSCoR programs themselves as infrastructure continues to grow. This vision should be further developed, vetted, and eventually implemented. The issue of increasing the number of states seeking support through the program was addressed in the review. The COV noted that the increase in the number of eligible jurisdictions has strained limited resources. In FY2002, 5,595 proposals were received, and 1,511 awards were made with a funding rate of 27.0%. In FY2006, 7,037 proposals were received, and 1,489 awards were made with a funding rate of 21.0%. The report stated that Given the likely budgetary constraints to be imposed on EPSCoR in the coming years, the program runs the danger of not being able to serve its core clientele with the limited funds available if the number of eligible states and institutions continues to increase. At some point, the Foundation must more fully address infrastructure, capacity, and geographic distribution in its other grant programs. One solution might be for the Foundation to re-organize some of its existing programs in order to create an EPSCoR-like program that used "institutional competitiveness" rather than "state competitiveness" as the primary definitional criterion for support. Additional issues and questions were included in the August 2005 review by the COV. The review found that the majority of EPSCoR programs were capacity building based (infrastructure). The COV proposed that the significant number of capacity building programs should be supplemented with "complementary programs for building capability and competitiveness." The SBRC grant mechanism was cited as important to expanding the "competitiveness" building component of EPSCoR. Also, the COV report found that while EPSCoR's program portfolio was diverse, and included minority serving institutions, community colleges, and high schools, it was determined that EPSCoR jurisdictions should further strengthen the linkages between faculty at minority serving institutions and those at research intensive institutions. An examination of the review process for large RII-type proposals concluded that the review process should be more rigorous. The COV proposed including site visits in the review process, and in enlarging the pool of reviewers in the scientific and technical areas proposed for research. The review noted that with the current, relatively small number of reviewers of EPSCoR programs, there is "insufficient injection of new viewpoints in the review process." The report suggested that the pool of reviewers should be expanded by rotating in a minimum of 25.0% new reviewers each year. The report further proposed that EPSCoR management use the review model employed by NSF's Engineering Research Centers, Science and Technology Centers, and Science of Learning Centers. Many of the questions posed by the EPSCoR COV following its review of the program are those that are being debated by the various stakeholders in the EPSCoR community. In particular, questions concerning the criteria used to determine when a state or jurisdiction graduates from the EPSCoR program may continue to receive Congressional attention during the 112 th Congress. On March 2, 2007, Senator Rockefeller introduced S. 753 , EPSCoR Research and Competitiveness Act of 2007. S. 753 would have authorized appropriations for FY2008-FY2012 to NSF for EPSCoR in the following amounts: FY2008, $125.0 million; and FY2009-FY2012, $125.0 million and "... $125,000,000 multiplied by a percentage equal to the percentage by which the Foundation's budget request for such fiscal year exceeds the total amount appropriated to the Foundation for fiscal year 2008." Language in the bill would have required the development of plans that allow EPSCoR states and jurisdictions to participate in NSF's Cyberinfrastructure Initiative and Major Research Instrumentation program. S. 753 would have required the NSF Director to obligate not less than 20.0% of the EPSCoR budget on co-funding projects that are ranked, by peer review, in the top 20.0% of all submitted grant proposals. Also, EPSCoR states and jurisdictions participating in the RII grant mechanism would have had to include in the proposals, partnerships with out-of-state research institutions. S. 753 was referred to the Senate Committee on Health, Education, Labor, and Pensions. It saw no further action. On January 4, 2011, President Obama signed into law the America COMPETES Reauthorization Act, FY2010 ( P.L. 111-358 ). The law authorizes appropriations for the NSF from FY2011 through FY2013 (FY2011, $7,424.4 million; FY2012, $7,800.0 million; and FY2013, $8,300.0 million). The authorization does not provide any specific funding levels for EPSCoR. However, the legislation includes language stating that The NSF Director shall continue EPSCoR to help eligible states develop their research infrastructure that will make them more competitive for research funding. The program shall continue to increase as NSF funding increases. A cross-agency evaluation of EPSCoR and other federal EPSCoR-like programs will be conducted, examining accomplishments, management, investment, and metric-measuring strategies implemented by the different agencies directed at increasing the number of new investigators receiving peer-reviewed funding. The examination will also include the degree of broadening of participation, knowledge generation, application, and linkages to national research and development competitiveness. The legislation also directs the National Academy of Sciences to conduct a study on the EPSCoR program to determine, among other things, the effectiveness of each state program; recommendations for improvements for all participating agencies to reach EPSCoR goals; and an assessment of the effectiveness of participating states in using awards to develop and build their science and engineering infrastructure. This study of EPSCoR and EPSCoR-like programs will provide recommendations that may result in policy implications for various federal agencies. It is anticipated that this study will be completed in August 2013. On November 18, 2011, the President signed into law the Commerce, Justice, Science, and Related Agencies Appropriations Act, FY2012 ( P.L. 112-55 ). The law provided a total of $7,033.1 million for the NSF in FY2012, $120.5 million above the FY2011 enacted level of $6,912.6 million. EPSCoR is contained within the Integrative Activities account and was funded at $150.9 million in FY2012, $4.1 million above the FY2011 level. The FY2012 appropriation supported a portfolio of three complementary investment strategies--research infrastructure improvement ($110.0 million), co-funding ($39.4 million), and outreach and workshops ($1.2 million)--for the 29 EPSCoR jurisdictions. The NSF indicated that approximately 24.0% of the funding for EPSCoR is to be used for new research awards in FY2012, with the balance providing continuing support for ongoing grants. The Administration's FY2013 budget request for the NSF is $7,373.1 million, a 4.8% increase over the FY2012 estimate of $7,033.1 million. Included in the total is $158.2 million for EPSCoR, an increase of 4.8% over the FY2012 level. NSF estimates that approximately 40.0% of the FY2013 requested funding will be made available for new awards. The balance will be directed at supporting awards made in prior years.

The Experimental Program to Stimulate Competitive Research (EPSCoR) of the National Science Foundation (NSF) was authorized by Congress in 1978, partly in response to concerns in Congress and the concerns of some in academia and the scientific community about the geographic distribution of federal research and development (R&D) funds. It was argued that there was a concentration of federal R&D funds in large and wealthy states and universities, and that the continuation of such funding patterns might ensure a dichotomy between the "haves" and "have-nots." EPSCoR began in 1979 with five states and funding of approximately $1.0 million. Currently, EPSCoR operates in 29 jurisdictions, including 27 states and the Commonwealth of Puerto Rico and the U.S. Virgin Islands. To 2006, the NSF had invested approximately $920.0 million in EPSCoR programs and activities. When established, it operated solely in the NSF. EPSCoR was expanded in the mid-1980s and early 1990s; by 1998, seven other agencies had established EPSCoR or EPSCoR-like programs. EPSCoR is a university-oriented program, with the goal of identifying, developing, and utilizing the academic science and technology resources in a state that will lead to increased R&D competitiveness. The program is a partnership between NSF and a state to improve the R&D competitiveness through the state's academic science and technology (S&T) infrastructure. Eventually, it is hoped that those states receiving limited federal support would improve their ability to compete successfully for federal and private sector funds through the regular grant system. On November 18, 2011, President Barack Obama signed into law the Commerce, Justice, Science, and Related Appropriations Act, FY2012, P.L. 112-55. The law provides, among other things, funding for the NSF. The law provides a total of $7,033.1 million for the NSF in FY2012, $173.2 million above the FY2011 enacted level. Included in the total funding for NSF is $150.9 million for EPSCoR, approximately $5.5 million above the FY2011 level. The FY2012 appropriation for EPSCoR supports a portfolio of three complementary investment strategies--research infrastructure improvement ($110.0 million), co-funding ($39.4 million), and outreach and workshops ($1.5 million). It is anticipated that approximately 24.0% of the funding for EPSCoR in FY2012 will be used for new research awards. The remaining will be directed at providing support for grants made in previous years. The Administration's FY2013 budget request for the NSF is $7,373.1 million, a 4.8% increase ($340.00 million) over the FY2012 estimate of $7,033.1 million. Included in the request total is $158.2 million for EPSCoR, an increase of 4.8% over the FY2012 estimate. Approximately 40.0% of the requested funding for EPSCoR in FY2013 will be directed toward new awards. The balance will support continuing awards made in prior years. This report will be updated periodically.

E nacted over three decades ago, Title IX of the Education Amendments of 1972 prohibits discrimination on the basis of sex in federally funded education programs or activities. Although Title IX bars recipients of federal financial assistance from discriminating on the basis of sex in a wide range of educational programs or activities, both the statute and the implementing regulations have long permitted school districts to operate single-sex schools. In 2006, however, the Department of Education (ED) issued Title IX regulations that, for the first time, authorized schools to operate individual classes on a single-sex basis. The issuance of these regulations has raised a number of legal questions regarding whether single-sex classrooms pose constitutional problems under the equal protection clause or conflict with statutory requirements under Title IX or under the Equal Educational Opportunities Act (EEOA). Under Title IX, "No person ... shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance." Although the statute prohibits a broad range of discriminatory actions, such as bias in college sports and sexual harassment in schools, Title IX does contain several exceptions. One of these exceptions provides that, with respect to admissions, Title IX applies only to institutions of vocational education, professional education, and graduate higher education, and to public institutions of undergraduate higher education, unless the latter has traditionally admitted students of only one sex. As a result, Title IX does not apply to admissions to nonvocational elementary or secondary schools, nor does it apply to certain institutions of undergraduate higher education. This means that Title IX permits public or private single-sex elementary and secondary schools, as well as some single-sex colleges. This exception for single-sex schools has existed since the legislation was enacted, and "the legislative history indicates that Congress excepted elementary and secondary schools from Title IX because of the potential benefits of single-sex education." Less clear is whether Congress intended to permit coeducational schools to establish individual classes on a single-sex basis, as ED's regulations now allow. Noting that some studies demonstrate that students learn better in a single-sex educational environment, ED issued new Title IX regulations in 2006 that provide recipients of educational funding with additional flexibility in providing single-sex classes. The regulations apply to both public and private elementary and secondary schools but not to vocational schools. Specifically, the regulations permit recipients to offer single-sex classes and extracurricular activities "if (1) the purpose of the class or extracurricular activity is achievement of an important governmental or educational objective, and (2) the single-sex nature of the class or extracurricular activity is substantially related to achievement of that objective." In its regulations, ED identified two objectives that would meet the first requirement: (1) to provide a diversity of educational options to parents and students, and (2) to meet the particular, identified educational needs of students. According to the regulations, any schools that choose to provide single-sex classes must meet certain requirements designed to ensure nondiscrimination. For example, participation in single-sex classes must be completely voluntary, recipients must treat male and female students in an "evenhanded" manner, and a recipient's justification must be genuine. These latter requirements mean than a school's use of overly broad sex-based generalizations in connection with offering single-sex education would be sex discrimination. Thus, recipients are prohibited from providing single-sex classes on the basis of generalizations about the different talents, capacities, or preferences of either sex. In addition, although schools must always provide a "substantially equal" coeducational class in the same subject, they are not always required to provide single-sex classes for the excluded sex, unless such classes would be required to ensure nondiscriminatory implementation. If recipients can show that students of the excluded sex are not interested in enrolling in a single-sex class or do not have educational needs that can be addressed by such a class, then they are not required to offer a corresponding single-sex class to the excluded sex. Although schools must offer classes that are substantially equal, these classes do not have to be identical. In comparing classes under the "substantially equal" requirement, ED will consider a range of factors, including, but not limited to, admissions policies; the educational benefits provided, including the quality, range, and content of curriculum and other services, and the quality and availability of books, instructional materials, and technology; the qualifications of faculty and staff; the quality, accessibility, and availability of facilities and resources; geographic accessibility; and intangible features, such as the reputation of the faculty. In order to ensure compliance with the regulations, recipients are required to periodically conduct self-evaluations, and students or their parents who believe the regulations have been violated may file a complaint with the school or with ED. ED also has the authority to conduct periodic compliance reviews. According to the National Association for Single Sex Public Education, there are currently at least 514 public schools in the United States that offer single-sex education in the form of single-sex schools or classrooms. As noted above, the enactment of the new regulations raises questions regarding whether ED has the statutory authority under Title IX to authorize single-sex classrooms and whether the regulations comply with the statutory requirements of the EEOA. Although Title IX explicitly authorizes single-sex schools, the statute is silent with respect to the question of single-sex classrooms within schools that are otherwise coeducational. As a result, it is possible that the regulations could face a legal challenge on the grounds that ED exceeded its statutory authority. Any court ruling as to the validity of ED's regulations would hinge on the level of deference paid to the agency decision by the reviewing court. The standard for judicial review of such agency action was delineated in Chevron U.S.A. Inc. v. Natural Resources Defense Council . There, the Supreme Court established that judicial review of an agency's interpretation of a statute consists of two related questions. First, the court must determine whether Congress has spoken directly to the precise issue at hand. If the intent of Congress is clear, the inquiry is concluded, since the unambiguously expressed intent of Congress must be respected. However, if the court determines that the statute is silent or ambiguous with respect to the specific issue at hand, the court must determine "whether the agency's answer is based on a permissible construction of the statute." It is important to note that the second prong does not require a court to "conclude that the agency construction was the only one it permissibly could have adopted to uphold the construction, or even the reading the court would have reached if the question initially had arisen in a judicial proceeding." The practical effect of this maxim is that a reasonable agency interpretation of an ambiguous statute must be accorded deference, even if the court believes the agency is incorrect. Ultimately, given Title IX's silence with respect to single-sex classrooms, it's possible, but not certain, that a court could determine that the statutory language was ambiguous enough to support ED's interpretation of the statute. Although the EEOA contains a congressional finding that "the maintenance of dual school systems in which students are assigned to schools solely on the basis of race, color, sex, or national origin denies to those students the equal protection of the laws guaranteed by the fourteenth amendment," the statute's prohibition against "the deliberate segregation" of students applies only to segregation on the basis of race, color, or national origin, but not sex. Therefore, ED's regulations regarding single-sex classrooms do not appear to conflict with the EEOA. Over the years, several courts have considered the question of whether single-sex education violates the EEOA. Although these cases, which are few in number, have contemplated single-sex schools rather than single-sex classes, they are instructive. For example, in Vorchheimer v. School District of Philadelphia , the Court of Appeals for the Third Circuit considered a challenge filed by a female student who was denied admission to an all-male public high school in Philadelphia. Because the statute did not explicitly prohibit the segregation of schools by sex and because the corresponding all-female high school was found to provide equal educational opportunities for girls, the court rejected the EEOA challenge. In United States v. Hinds County School Board , however, the Fifth Circuit held that the EEOA prohibited a Mississippi school district from splitting the four schools in the district into two all-male schools and two-all female schools. The court distinguished the case from the Vorchheimer decision, noting that Vorchheimer involved two voluntary single-sex schools in an otherwise coeducational school system while the Mississippi school district in question involved the mandatory sex segregation of all of the schools, and therefore all of the students, in the system. Read together, these cases indicate that the EEOA may permit single-sex schools as long as coeducational options are available. Such an interpretation would mean that the new Title IX regulatory requirements are consistent with the EEOA. As noted above, the 2006 Title IX regulations may raise constitutional issues for public schools that offer single-sex classes. Under the equal protection clause of the Fourteenth Amendment, which prohibits the government from denying to any individual the equal protection of the law, governmental classifications that are based on sex receive heightened scrutiny from the courts. Laws that rely on sex-based classifications will survive such scrutiny only if they are substantially related to achieving an important government objective. Currently, there are only two Supreme Court cases that address the equal protection implications of sex-segregated schools. Although both of these cases occurred in a higher education setting, they provide some guidance that may be applicable to the elementary and secondary education context. In the earlier case, Mississippi University for Women v. Hogan , the Court held that the exclusion of an individual from a publicly funded school because of his or her sex violates the equal protection clause unless the government can show that the sex-based classification serves important governmental objectives and that the discriminatory means employed are substantially related to the achievement of those objectives. Because the Court found that the state had not met this burden, it struck down Mississippi's policy of excluding men from its state-supported nursing school for women. The Court's most recent constitutional pronouncement with respect to sex discrimination in education occurred in United States v. Virginia . In that case, the Court held that the exclusion of women from the Virginia Military Institute (VMI), a public institution of higher education designed to prepare men for military and civilian leadership, was unconstitutional, despite the fact that the state had created a parallel school for women. Although the Court reiterated that sex-based classifications must be substantially related to an important government interest, the Court also appeared to conduct a more searching form of inquiry by requiring the state to establish an "exceedingly persuasive justification" for its actions. According to the Court, this justification must be genuine and must not rely on overbroad generalizations about the talents, capacities, or preferences of men and women. In applying this standard, the Court rejected the two arguments that Virginia advanced in support of VMI's exclusion of women, namely, that the single-sex education offered by VMI contributed to a diversity of educational approaches in Virginia and that VMI employed a unique method of training that would be destroyed if women were admitted. In rejecting VMI's first argument, the Court concluded that VMI had not been established or maintained to promote educational diversity. In fact, VMI's "historic and constant plan" was to offer a unique educational benefit to only men, rather than to complement other Virginia institutions by providing a single-sex educational option. With respect to Virginia's second argument, the Court expressed concern over the exclusion of women from VMI because of generalizations about their ability. While the Court believed that VMI's method of instruction did promote important goals, it concluded that the exclusion of women was not substantially related to achieving those goals. After determining that VMI's exclusion of women violated constitutional equal protection requirements, the Court reviewed the state's remedy, a separate school for women known as the Virginia Women's Institute for Leadership (VWIL). Unlike VMI, VWIL did not use an adversarial method of instruction because it was believed to be inappropriate for most women, and VWIL lacked the faculty, facilities, and course offerings available at VMI. Because VWIL was not a comparable single-sex institution for women, the Court concluded that it was an inadequate remedy for the state's equal protection violations, and VMI subsequently became coeducational. In light of the VMI case, it appears that schools that establish single-sex classrooms under ED's Title IX regulations may face some legal hurdles but are not necessarily constitutionally barred from establishing such classes. Consistent with the Court's ruling, the Title IX regulations require schools that wish to establish single-sex classes to demonstrate that such classes serve an important governmental objective and are substantially related to achievement of that objective. What is unclear is whether the objectives approved by the Title IX regulations--to provide a diversity of educational options to parents and students and to meet the particular, identified educational needs of students--would be sufficiently "important" to pass judicial review. Although the Virginia Court rejected VMI's diversity rationale, it did so because it found that VMI's justification was not genuine. As a result, the Court has not ruled on whether diversity is an important governmental objective in cases involving sex-based classifications, although the Court, which stated in the VMI case that it does not question "the State's prerogative evenhandedly to support diverse educational opportunities," may be inclined to uphold the diversity rationale with regard to the new Title IX regulations. Moreover, the Virginia Court ruled that the parallel school Virginia established for women--VWIL--was not a sufficient remedy for the exclusion of women from VMI because it lacked the faculty, facilities, and course offerings available at VMI. In contrast, the Title IX regulations require schools that offer single-sex classes to provide "substantially equal" classes to the excluded sex. While it's not clear whether the Court would view the "substantially equal" requirement as sufficient to pass constitutional muster, judicial resolution in a given case would most likely depend on the specific facts surrounding a school's single-sex class offerings. Indeed, organizations such as the American Civil Liberties Union (ACLU) regularly file lawsuits against schools that provide single-sex education. For example, the ACLU has filed a lawsuit alleging that single-sex classrooms in Breckenridge County, KY violate the Constitution, Title IX, the EEOA, and state antidiscrimination law and that ED's Title IX regulations violate the Constitution, Title IX, and the Administrative Procedures Act.

Under Title IX of the Education Amendments of 1972, which prohibits sex discrimination in federally funded education programs or activities, school districts have long been permitted to operate single-sex schools. In 2006, the Department of Education (ED) published Title IX regulations that, for the first time, authorized schools to establish single-sex classrooms as well. This report evaluates the regulations in light of statutory requirements under Title IX and the Equal Educational Opportunities Act (EEOA) and in consideration of constitutional equal protection requirements.

A spate of autumn 2008 news stories reported the downsizing or closure of periodicals and their publishers due to financial challenges: U.S. News & World Report magazine will reduce its paper issues to once per month; Time Inc., which publishes 24 magazines for the U.S. market, has said it will cut 600 jobs, about 6% of its workforce; Alpha Media Group, publishers of Maxim and other magazines for young men, will lay off 50 to 60 of its staffers; Hearst magazines will transition CosmoGirl magazine to a web-only publication; Conde Nast announced that it would reduce its business magazine, Portfolio , from 12 issues per year to 10, and Men ' s Vogue from 10 issues per year to 2; Radar magazine ceased operations in October, and Manhattan Media Inc. announced that it had put off its plans to restart publication of 02138 , a lifestyle magazine for Harvard University alumni; and The century-old Christian Science Monitor , a newspaper that is delivered via U.S. mail five days per week, will cease publishing in paper format in April 2009. Except for a weekend paper edition, the newspaper will become a Web-only publication. These are not the only periodicals so affected. Since 2006, revenue shortfalls have compelled many other magazines to cease publication or to become Web-only publications. Generally, observers have cited three causes for periodicals' recent difficulties: (1) a decline in subscriptions, (2) a rise in paper costs, and (3) a decline in advertising revenue due to the downturn of the U.S. economy and advertisers' decisions to spend larger portions of their advertising budgets on websites instead of print publications. The aforementioned factors are not the only factors that have negatively affected the survival of periodicals. As with any business, firm-specific causes, such as managerial errors (e.g., financial mismanagement) and oversupply (e.g., too many periodicals competing for the same audience of readers), also have come into play. In light of these high profile incidents, and because of a possible U.S. Postal Service postage increase in 2009, the 111 th Congress may be asked to help periodical publishers reduce their operating costs by providing them with increased postage subsidies. Some publishers sought postage relief during the 110 th Congress. Such assistance would not be unprecedented. In fact, as this report details, Congress has subsidized periodicals postage since the founding of the United States. Postage on periodicals has been subsidized since the U.S. postal system was established more than two centuries ago. Initially, senders of all types of mail were subsidized--they did not have to pay postage. Instead, the U.S. Post Office Department (herein, Post Office) attempted to collect postage from the persons who received mail. Periodicals, though, benefitted from an additional subsidy. The Post Office Act of 1792 (1 Stat. 238) set the postage charged to the recipients of newspapers lower than the postage charged to the recipients of letters. In 1794, Congress expanded this subsidy to include magazines, although the postage on magazines was not set as low as the postage on newspapers (1 Stat. 362). These subsidies were problematic for the Post Office. It struggled to collect postage from mail recipients, who often balked at paying, and suffered significant costs from carrying periodicals. According to one estimate, by 1801, "newspapers constituted 45 percent of all pieces mailed, but defrayed a mere eight percent of the [Post Office's] costs." The Post Office's costs exceeded its revenues, so each year, Congress appropriated funds to cover the costs not provided for by postage. The Post Office's periodicals revenue problem continued unabated until 1874, when Congress enacted a statute that required publishers to prepay postage (18 Stat. 232). Publishers were charged two cents per pound of newspapers and three cents per pound of magazines. This began to remedy the revenue shortfall, yet the postage charged still did not cover the total periodical delivery costs to the Post Office. Congress subsidized the delivery of newspapers, then magazines, for at least three reasons. First, some Members of Congress reasoned that if citizens were to play their role in a democratic republic, they needed to have information on matters affecting the nation. Telegraphs, radio, and other modern information technologies did not yet exist. Newspapers were a means to provide information to the geographically dispersed members of the public so they might ably discharge their duties as citizens. Second, publishers, who gained increased readerships through subsidized delivery, actively lobbied Congress and, by editorial and other means, could attempt to unseat Members who voted contrary to the publishers' interests. Third, as the newly formed political parties developed, Congress saw the mails as a means for getting their message out and winning elections. This national policy of subsidizing newspapers was problematic, though, because it did not clearly define what constituted a newspaper. Postmasters general and postal employees were obliged to work out definitions themselves on the fly. Some Post Office officials thought a publication's format was conclusive--if it was printed on a single sheet of large paper, it was a newspaper. Others at the Post Office looked to the publication's contents or frequency of publication. Seeing the incentives available, advertisers produced advertisements that looked like newspapers and magazines in order to receive the periodicals postage subsidy. Over the course of the 19 th century, Congress and the Post Office sought a policy that would clearly distinguish between publications with contents worthy and unworthy of government postage subsidies. In 1852, Congress reworked the postage rate schedule to provide the same subsidized postal rates for newspapers, magazines, and circulars (10 Stat. 38-39). Congress enacted other incremental alterations in 1863 (12 Stat. 705), 1872 (17 Stat. 300), and 1874 (18 Stat. 233), which set higher postal rates for other "printed matter," such as advertisements, and, critically, required mailers of periodicals to prepay postage. The Post Office was no longer obliged to attempt to collect postage from mail recipients. Despite these efforts, the Post Office continued to be inundated with non-periodical mail pieces that mailers wished to send at subsidized periodicals postage rates. They could do this because the laws governing the mails simply did not provide a clear distinction between periodicals and non-periodicals. With the Post Office's support, Congress further refined postal classifications. An 1876 statute distinguished advertising mail from periodicals by referring to the former as a "publication designed primarily for advertising" (19 Stat. 82). Three years later, Congress enacted a significant reclassification of mail types and postage (20 Stat. 358-361). The statute limited periodical or second-class mail to "printed paper sheets, without board, cloth, leather, or substantial binding." It required a publisher seeking a periodical postage rate to register the publication with the Post Office, which would certify that the printed matter met the new statutory criteria for second-class mail. By law, a periodical had to be published at regular, stated intervals, and be addressed to a particular subscriber (e.g., John Q. Public, 74 Further Lane), not the household (Resident, 74 Further Lane). The 1879 law also included a provision that attempted to distinguish periodicals from non-periodicals based on content. While a periodical was permitted to carry advertisements, its total contents had to be devoted primarily to "information of a public character, or devoted to literature, the sciences, arts, or some special industry" (20 Stat. 359). Reduced postage rates, then, would not be limited only to magazines that carried information directly relevant to government, policy, and politics. Mail pieces that failed to meet the second-class criteria were charged the higher third-class postal rates levied on pamphlets, books, and other printed matter. Underlying the 1876 and 1879 laws' distinction between periodical mail and advertising mail was a principle enunciated by Arthur H. Bissell, an attorney for the Post Office--postage on periodicals that benefited the nation by informing the public on useful matters might justifiably be subsidized by taxpayers. However, "the government should not carry at a loss to itself publications which are simply private advertising schemes." Despite these efforts to limit access to subsidized periodicals postage, some publishers still attempted to pass off non-periodicals as such. During the first seventy years of the 20 th century, Congress little altered the postal laws that provided reduced rates for periodicals. Congress did expand the range of mailers whose publications could qualify for periodical postage rates even if they did not meet the legal standards for what constituted a periodical. Fraternal groups, religious organizations, and not-for-profit entities were permitted to mail their publications at the reduced periodicals postage rates (28 Stat 104-105; 37 Stat. 551; and 40 Stat. 328). Some lauded these expansions of the availability of subsidized periodical postage, while others expressed concerns over the utility of these policies. Congress also further refined the postal laws to distinguish editorial from advertising content. In 1917, Congress bifurcated the postage rates paid by periodicals. Mailers would be charged one rate for the editorial portion of the periodical, and a higher rate for the advertising portion (40 Stat. 328). In 1951, Congress enacted a statute that prohibited providing periodicals postage rates to any publications "having more than 75 per centum advertising in more than one-half of its issues during any twelve-month period" (65 Stat. 762). In 1960, Congress enacted a statute to recodify the nation's postal laws. The definition of a periodical had changed little since 1879 (74 Stat. 666-667). The law required a periodical to (1) be regularly issued at stated intervals as frequently as four times a year and bears a date of issue and is numbered consecutively; (2) be issued from a known office of publication; (3) be formed of printed sheets; (4) be published for the dissemination of information of a public character, or devoted to literature, the sciences, arts, or a special industry; and (5) have a legitimate list of subscribers. Additionally, any publication seeking the periodicals postage rate could not consist of more than 75 percent advertising in more than half of any of its issues in any 12-month period. There matters stood until Congress enacted major reforms in 1970. In the late 1960s, the Post Office was widely recognized to be in crisis. The department had been running deficits for years. In FY1967, it spent $1.2 billion more than it earned. Periodicals mail was the biggest money loser for the Post Office, contributing nearly $400 million to the department's deficit that year. The postage on periodicals covered only about a quarter of the delivery costs. As before, taxpayers made up the shortfalls through annual appropriations. Congress addressed this problem and many others afflicting the Post Office by enacting the Postal Reorganization Act of 1970 (PRA; 84 Stat. 719-787; 39 U.S.C. 101 et seq.). The statute abolished the Post Office Department, replacing it with the U.S. Postal Service (USPS), an "independent establishment of the executive branch." This new entity was designed to be financially self-sufficient, that is, it was to operate without annual congressional appropriations. To this end, the PRA provided the USPS with greater authority over its operations so that it could control its costs and boost its revenues. The law also had effects on periodicals, which had continued to fail to provide the USPS with revenues that covered the cost of their delivery. As described above, periodicals had received special treatment under postal law since 1792. The PRA required periodicals to be charged "reduced rates" (84 Stat. 762-763; 39 U.S.C. 3626). Additionally, the PRA did not end the policy enacted in 1917 (40 Stat. 328) that required lower postage rates for the editorial portion of a periodical than for the advertising portion. Hence, the law permitted periodicals to continue to pay postage rates that were subsidized. The PRA retained much of the earlier statutory criteria. To receive periodicals rates, a publication had to meet the following requirements: (a) Each owner of a publication having periodical publication mail privileges shall furnish to the Postal Service at least once a year, and shall publish in such publication once a year, information in such form and detail and at such time as the Postal Service may require with respect to-- (1) the identity of the editor, managing editor, publishers, and owners; (2) the identity of the corporation and stockholders thereof, if the publication is owned by a corporation; (3 ) the identity of known bondholders, mortgagees, and other security holders; (4) the extent and nature of the circulation of the publication, including, but not limited to, the number of copies distributed, the methods of distribution, and the extent to which such circulation is paid in whole or in part; and (5) such other information as the Postal Service may deem necessary to determine whether the publication meets the standards for periodical publication mail privileges. The Postal Service shall not require the names of persons owning less than 1 percent of the total amount of stocks, bonds, mortgages, or other securities. (b) Each publication having such mail privileges shall furnish to the Postal Service information in such form and detail, and at such times, as the Postal Service requires to determine whether the publication continues to qualify for such privileges. (c) The Postal Service shall make appropriate rules and regulations to carry out the purposes of this section, including provision for suspension or revocation of periodical publication mail privileges for failure to furnish the required information (84 Stat. 765-766; 39 U.S.C. 3685). These requirements remain in law, and the USPS's interpretations of these requirements and its interpretation of what constitutes a "periodical" may be found in the USPS's Domestic Mail Manual . PRA dramatically reduced Congress's role in setting postal rates, shifting this responsibility to USPS and the newly created Postal Rate Commission (PRC, renamed the Postal Regulatory Commission in 2006). PRA mandated that postal rates and fees be set so that USPS's revenues would equal its costs (84 Stat. 760). It devised a new quasi-judicial process for setting postage rates. USPS would file a request for rate increases with the PRC; the public and interested parties would submit comments and rebuttals; then the PRC would produce a "recommendation" of rates that USPS's board of governors could accept, reject, or return to the PRC for further consideration (84 Stat. 760-762). The recommendation of the PRC had to be based upon the following factors: (1) the establishment and maintenance of a fair and equitable schedule; (2) the value of the mail service actually provided each class or type of mail service to both the sender and the recipient, including but not limited to the collection, mode of transportation, and priority of delivery; (3) the requirement that each class of mail or type of mail service bear the direct and indirect postal costs attributable to that class or type plus that portion of all other costs of the Postal Service reasonably assignable to such class or type; (4) the effect of rate increases upon the general public, business mail users, and enterprises in the private sector of the economy engaged in the delivery of mail matter other than letters; (5) the available alternative means of sending and receiving letters and other mail matter at reasonable costs; (6) the degree of preparation of mail for delivery into the postal system performed by the mailer and its effect upon reducing costs to the Postal Service; (7) simplicity of structure for the entire schedule and simple, identifiable relationships between the rates or fees charged the various classes of mail for postal services; and (8) such other factors as the Commission deems appropriate. (84 Stat. 760-761) Many of these criteria include calculations of value and cost. For example, for the first time, periodicals (and all mail classes) were to "bear the direct and indirect postal costs attributable to that class or type plus that portion of all other costs of the Postal Service reasonably assignable to such class or type" (84 Stat. 760). None of the PRA's criteria, however, required the PRC to provide reduced postage rates for mail devoted to "the dissemination of information of a public character, or devoted to literature, the sciences, arts, or a special industry." The PRA had an immediate effect on all mail classes, including periodicals. In setting second-class rates, the costs to USPS now had to be considered. PRA did authorize "revenue forgone" appropriations for some types of mail, such as not-for-profit mailings (84 Stat. 762-763). Generally, though, the law required postage to cover the costs to USPS of receiving, handling, and delivering mail. The PRA had significant effects on postage rates, and on periodicals rates in particular. In 1972, USPS and the PRC agreed to raise periodicals postage rates significantly. The two agencies agreed to further large increases in periodicals postage rates in 1974. In 1976, the PRC recommended raising rates further still. The PRA established timetables for phasing out the subsidies for periodicals over five years. In 1974, Congress lengthened this phase-out period to eight years (88 Stat. 287). Congress justified this extension on the basis of publishers' economic hardship--the industry claimed it was suffering from the significantly increased postage rates. Despite the PRA's changes to the law and the postage increases, periodicals did not cease to be subsidized. For one, the PRA did not end the policy enacted in 1917 (40 Stat. 328) that required lower postage rates for the editorial portion of a periodical than for the advertising portion. For another, the statute required each mail class to bear its "attributable cost," but not its "total cost," which includes both its attributable cost (i.e., the cost to USPS to process a particular class of mail), and its "institutional cost" (i.e., the cost that is fixed, such as the compensation of a mail carrier, who delivers all classes of mail). Because the PRA required all mail and postal services to collectively cover USPS's costs, when periodicals failed to cover their attributable and institutional costs, other classes of mail had to cover the shortfall. After the steep postage increases of the early 1970s, some publishers had protested that the new postage rates were too high. Some of them publicly pondered using private couriers to deliver their periodicals. In 1976, Congress amended the PRA to underscore its desire that periodicals mailers were to pay postage that was less than their total delivery costs. The new law required the PRC to consider an additional criterion when setting postage rates--"the educational, cultural, scientific, and informational value to the recipient of mail matter" (90 Stat. 1303; 39 U.S.C. 3622(b)(8)). Between 1971 and 1996, the repeated increases of periodicals postage helped the mail class cover its attributable costs ( Figure 1 ) and provide significant revenues toward USPS's institutional costs ( Figure 2 ). After 1996, however, periodicals postage revenue did not climb as quickly as their delivery costs, and periodicals ceased contributing revenues toward the USPS's institutional costs. By 2006, periodicals revenue had fallen nearly $375 million below their attributable costs. It is difficult to determine the cause or causes for the decline of periodicals revenues relative to the USPS's costs to deliver them. The data above are not conclusive, although one observation may be made. For reasons unclear, the USPS did not propose to increase periodicals postage in 1997, and as Figure 1 indicates, a drop in cost coverage followed. However, it must be noted that subsequently the USPS and PRC agreed to raise periodicals rates repeatedly. In 2000, the USPS proposed boosting rates 14.4%; the Postal Rate Commission suggested lowering that increase to 9.9% after the USPS announced that it had devised means to reduce its periodicals processing costs. The USPS and PRC agreed to increase postage on periodicals more than 10% in 2002, and more than 5% in 2005. Nevertheless, these higher rates did not increase revenues sufficiently so that periodicals covered their attributable costs. The USPS filed a rate case on May 3, 2006. "Without rate and fee changes," the USPS explained, it "would incur a substantial revenue deficiency in the proposed test year, in contravention of 39 U.S.C. 3621." Periodicals rates were particularly problematic. Postmaster General John E. Potter later testified before Congress that the volume of periodicals mailed had declined 13 percent between 2000 and 2006, and some periodicals paid rates that did not cover even their attributable, let alone institutional, costs. The PRC Chairman, Dan Blair, told Members of a House Subcommittee that USPS's costs of delivering first-class and standard mail letters have remained essentially flat over the past 10 years and as a result, the rates for that mail have been fairly stable. This is in sharp contrast to the spiraling costs associated with periodicals. For many years, the Commission has sought to keep periodicals postage rates as low as possible in the face of declining magazine mail volume and increasing Postal Service costs.... [M]agazines make the lowest contribution to overhead of any class of mail--roughly $3.6 million to fund almost $35 billion in [USPS] overhead costs. After holding open hearings, accepting public comment, and reviewing testimony submitted from witnesses, the PRC issued its recommended decision on February 26, 2007. The USPS, with a few caveats, accepted PRC's recommended postage rates. Most of the new postage rates were implemented on May 14, 2007, but USPS did not implement the new periodicals rates until July 15. According to Postmaster General Potter, the USPS delayed the new periodicals rates to give periodicals mailers time to adjust to the new and very different postage schedule. The PRC was concerned that periodicals as a class had "low cost coverage;" it made no contribution to the USPS's institutional costs, and had failed to cover all its attributable costs. Thus, the PRC recommended rates that would increase periodicals rates 11.8 percent. Additionally, the PRC held that the periodicals postage schedule should identify more of the "cost drivers" within USPS's mail handling process. Doing this required the PRC to produce a new periodicals rate schedule that was much more complex than the old one. The new schedule recognizes these cost drivers and reduces postage costs for mailers who undertake mail preparation activities (such as presorting mail pieces by zip code and stacking them on pallets) that lower USPS's handling costs. Rate case R2006-1 had direct effects on periodical subsidies. First, the postage subsidy would be reduced by requiring periodicals to cover a little more of their attributable costs. Second, by identifying more of the cost drivers in mail handling, the decision tacitly recognized that some periodicals mailers paid postage that covered a higher percentage of their attributable costs than other mailers. That is, these latter periodical mailers were receiving an intra-periodical class subsidy from the former periodical mailers. The new rate schedule would remedy this inequity. The new rate schedule for periodicals provoked much debate. Some critics suggested that the new periodicals rates were the result of a conspiracy. On the scale of giant social troubles, this one won't register, but as a breathtaking example of corporate influence and regulatory cronyism, it can't be beat. After almost a year of hearings, last month the Bush-appointed U.S. Postal Service Board of Governors tossed out their own staff recommendations and at the last minute approved a 758-page plan submitted by Time Warner that will increase mailing costs between 18 and 30 percent a year for small-circulation magazines like Mother Jones, while postal costs for the big guys--Time, Newsweek, People--will actually go down. The PRC stated that the goal of the new rate schedule was to better reflect costs, and send price signals that will encourage more efficient mailing practices. Periodicals costs have risen disproportionately in recent years, in part because current rates send such poor signals [to mailers]. For example, Periodicals is the only class where no rate penalty is applied to nonmachinable pieces. The [PRC] recommends a new design that draws from the separate proposals of the Postal Service and Time Warner Inc. The recommended rates recognize only a limited portion of the costs associated with identifiable cost drivers in order to moderate the impact on mailers. Nonetheless, Periodicals mailers are extremely cost conscious, and the Commission expects that these rates will foster more efficient, less costly Periodicals mail. Representatives from some periodicals complained that the new rate structure was unfair to publishers of small circulation magazines, who claimed they could not take the mail preparation steps required to reduce their postage costs. Some magazines and newspapers, sharply criticized the rate increases in editorials, and expressed concern that the higher rates imperiled their existence, thereby threatening free speech and the free flow of information. Sensing the dissension, the House Subcommittee on Federal Workforce, Postal Service, and the District of Columbia held a hearing on October 30, 2007. Victor Navasky, publisher emeritus of The Nation magazine, told Congress that the R2006-1 rate case decision had imperiled those magazines that devote the most space to public affairs--to covering in depth events like the hearings before this very subcommittee .... In the case of The Nation , the cost of mailing the magazine is already more than three times the cost of the paper on which it is printed.... [The new rates] will cost the magazine an additional $500,000 a year. Some small-circulation periodicals, Navasky warned, would "undoubtedly expire in the months ahead" due to the higher postage rates. In a letter to the subcommittee that was appended to the statement of Victor Navasky, Scott McConnell of The American Conservative , stated that the magazine faced a 58% increase in mailing costs, with postage rising from a little under 20 cents per issue to 31.5 cents per issue. Not everyone sympathized with these views. James O'Brien of Time Inc. told Congress that the USPS's cost of delivering periodicals had "outpaced inflation by more than 60% since 1986." The incentive structure of the rate system, O'Brien argued, was at fault. "Because the postage rates for periodicals did not reflect the Postal Service's costs, and gave mailers little reason to choose more efficient mailing practices, periodicals costs continued to escalate." Mark W. White of U.S. News & World Report, L.P., argued that the rate case did not benefit all large circulation publishers and afflict all small circulation publishers. His company, which mailed 95 million magazines in the previous fiscal year, faced a 15% increase in postage rates. White argued that the R2006-1 rate case decision had not gone far enough to end biases in the periodicals rate structure that benefit "inefficient mailers" at the expense of efficient periodicals mailers. Some critics of the new periodicals rates have argued that Congress should enact legislation to increase postage subsidies for small circulation magazines. During the 110 th Congress, no Member introduced legislation to alter postage rates for periodicals. The enactment of the Postal Accountability and Enhancement Act (PAEA; P.L. 109-435 ; 120 Stat. 3198-3263) in December 2006 made the future of the postage subsidy for periodicals less clear. The PAEA requires the new Postal Regulatory Commission (PRC) to devise a new postage rate-setting system. The statute states that an "objective" of the new system is that it will allocate "the total institutional costs of the Postal Service appropriately between market-dominant and competitive products" (120 Stat. 3201). Additionally, one of the "factors" that the PRC had to consider in establishing the new pricing system is the requirement that each class of mail or type of mail service bear the direct and indirect postal costs attributable to each class or type of mail service through reliably identified causal relationships plus that portion of all other costs of the Postal Service reasonably assignable to such class or type (120 Stat. 3201). Prima facie, it might appear that this provision requires each mail class, including periodicals, to cover all of its costs. Were this the case, it might be expected that the periodicals subsidy would diminish. This interpretation, however, does not appear to be correct. First, the PAEA does not state that each mail classes must cover its total costs. Rather, the law requires each mail class to cover its "attributable" costs. Second, the PAEA only requires that the USPS's institutional costs be allocated among mail classes "appropriately." The law does not define what "appropriately" means. The PRC interpreted it to mean that competitive products (overnight mail and other products) must contribute a minimum of 5.5% of the USPS's institutional costs. This would mean that up to 94.5% of the USPS institutional costs would need to be covered by market dominant products. However, neither the law nor the PRC's rules require periodicals or any other market dominant product to cover a particular percentage of these institutional costs. Third, the PAEA contains provisions that clearly favor the continued subsidization of periodicals as a class of mail. The PAEA did not abolish the longstanding statutory policy of lower postage rates for the editorial portion of a periodical. Also, the PAEA stipulates that one of the factors that the PRC is to consider in devising the new postage rate system is "the educational, cultural, scientific, and informational value to the recipient of mail matter" (120 Stat. 3202). In light of these points, nothing in the law would appear to indicate that the postage subsidy for periodicals need diminish. That said, the PAEA may provide one means under which periodicals postage could be greatly increased and its subsidies greatly reduced. The new rate-setting system mandated by the PAEA must limit the annual postage increases for periodicals and other market dominant products. Postage may not be increased more than the Consumer Price Index for All Urban Consumers (CPI-U) (120 Stat. 3202-3203). Thus far, it appears that both the PRC and the USPS strongly respect the PAEA's rate cap. On February 11, 2008, the USPS filed its first notice of increased postage for market dominant products. The Postal Service proposed to raise postage beginning May 12, 2008. It sought to increase periodicals postage 2.71%, an amount beneath the CPU-U of 2.9%. On March 17, 2008, the PRC found the proposal appropriate under the PAEA. However, the PAEA does permit postage increases in excess of the CPI-U in the event of an "extraordinary and exceptional circumstance." Neither the law nor the PRC's rules define what would constitute such a circumstance. Notably, the USPS may file its second annual notice for increased postage for periodicals and other non-market products in the winter of 2009. During 2008, the monthly CPI-U has been between 3.0% and 4.5%. The USPS is experiencing financial distress and operating deficits, due in part to a decline in mail volume. If the USPS's revenues continue to drop significantly and its operating costs increase, the USPS may argue that it is experiencing an "extraordinary and exceptional circumstance" that would justify raising the postage of periodicals and other market dominant products sharply. It is unclear whether the PRC would agree and accede to such an argument. Nor is it clear whether the PRC would interpret the law to permit the USPS to raise periodicals postage at a rate higher than that charged to other mail classes. Over the long-term, it is unclear whether the periodicals postage subsidy will increase or decrease. To date, the new rate schedule and the PAEA have not had any obvious effects on the periodicals postage subsidy. A PRC analysis found that in FY2007 periodicals postage revenues covered only 83% of the class's attributable costs, a shortfall of $448 million, and made no contribution toward the USPS's institutional costs. Government provision of postage subsidies for periodicals long has been a contentious issue because it involves disputed principles and vexing implementation issues. Some persons argue that periodicals play a unique role in a representative democracy, that they provide for a flow of information and ideas that benefit the nation. Adherents of this viewpoint argue that this special role means that periodicals deserve subsidization, and that this role was recognized by PRA, which requires USPS to "have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people" (39 U.S.C. 101(a)). Not everyone agrees with this policy. Some persons contest the purported contribution of periodicals to the public weal or suggest that other means of information transmission, such as the telephone, television, and the World Wide Web are at least equally effective. Still other individuals take the position that fairness requires that each mailer should pay his or her total postage costs. Meanwhile, other observers accept the importance of periodicals to a representative democracy, but suggest that actuating this idea into a policy has been an overly complex undertaking. As the above review of postage subsidy policy indicates, none has worked perfectly. Postage subsidies policies inevitably have raised two contentious questions: (1) Which periodicals should receive these subsidies?; and (2) Who should pay for these subsidies? The sheer diversity and plenitude of periodicals--from The Atlantic Monthly to People to Sports Illustrated to Zymurgy --has made enacting periodical postage subsidies a challenging and, frequently, expensive undertaking. Should Congress wish to consider attempting to assist periodicals publishers, it may wish to consider the following seven issues: (1) Are the conditions that are negatively affecting periodicals likely to continue? (2) Does the closure of some periodicals negatively affect the health of the U.S.'s democratic republic? (3) Is the transformation of periodicals from paper publications to online publications a positive or negative development? (4) Would increased postage subsidies greatly decrease the probability that more publishers will cease publication? (5) Would some other form of governmental aid--such as below market loans--be more helpful to periodicals publishers? (6) Should government assistance be provided to all periodicals regardless of their editorial subject matter (e.g., government and politics, celebrity news, sports, and hobbies)? (7) If periodicals should be further subsidized, what should be the goal of that subsidy? Should it cover the shortfall between periodicals postage revenues and periodicals attributable costs? Or should it also provide a contribution toward periodicals institutional costs?

Recently, financial challenges have compelled a number of publishers of periodicals (e.g., magazines and newspapers) to downsize their operations and to cease printing certain publications. To cite just two examples--Time Inc. has said it will cut 600 jobs, and the century-old Christian Science Monitor newspaper, which is delivered via U.S. mail five days per week, is to cease publishing in paper format in April 2009. In light of these high profile incidents, and because of a possible U.S. Postal Service postage increase in 2009, the 111th Congress may be asked to help periodical publishers by providing them with increased postage subsidies. Some publishers sought postage relief during the 110th Congress. Such assistance would not be unprecedented. In fact, Congress has subsidized periodicals' postage since the founding of the United States. This report describes and assesses the major federal policies that have subsidized postage for periodicals. These policies have been contentious because they involve disputed principles and vexing implementation issues. Some persons believe that periodicals provide important information about politics and government to U.S. citizens, which helps members of the public to discharge their civic duties. Others dispute this contention. Additionally, considerable implementation issues also arise, such as "which periodicals should receive these subsidies?" Since 1792, Congress has provided periodical mailers with reduced rates that are lower than their delivery costs. Initially, Congress funded these postage subsidies through annual appropriations. Senders of other types of mail, such as first-class letters, have paid rates that covered the revenue shortfall of periodicals. In 2007, the Postal Regulatory Commission (PRC) restructured the postage rate schedule to more accurately peg periodical rates to their delivery costs. The postage paid by some periodical mailers jumped dramatically and their postage subsidies fell. Later that same year, the PRC established the new rate-setting system mandated by the Postal Accountability and Enhancement Act (PAEA; P.L. 109-435; 120 Stat. 3198-3263). The system requires each class of mail to bear its "direct and indirect costs," but it also includes a rate cap that forbids the USPS from raising postage rates by more than the rate of inflation, except in "extraordinary or exceptional circumstances." The long-term effects of the new rate schedule and rate-setting system on periodicals subsidies are unclear. Thus far, the USPS's periodicals delivery costs continue to exceed greatly its periodicals postage revenues. This report will be updated as events warrant.

This report provides a chronology of events relevant to U.S. relations with North Korea in 2005 and is a continuation of CRS Report RL32743, North Korea: A Chronology of Events, October 2002-December 2004 , by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. The chronology includes significant meetings, events, and statements that shed light on the issues surrounding North Korea's nuclear weapons program. An introductory analysis highlights the key developments and notes other significant regional dynamics. Particular attention is paid to the Six-Party Talks, inter-Korean relations, key U.S. officials in charge of North Korean policy, Chinas leadership in the negotiations, Japans relationship with its neighbors, and contact with North Korea outside of the executive branch, including a Congressional delegation. In the chronology, key events are marked by bold text. The year 2005 saw little progress in resolving the North Korea nuclear issue. Although adjustments were made, such as changes to senior U.S. officials in charge of policy in East Asia and the addition of human rights and criminal activities to the agenda of items to cover with North Korea, overall relationships and regional trends saw no major reversals or breakthroughs. In the first half of 2005, North Korea escalated the security situation on the Korean peninsula through words and actions. On February 10, Pyongyang officials announced that North Korea had nuclear weapons and would indefinitely suspend its participation in the Six-Party Talks, the multilateral negotiation forum dedicated to the peaceful denuclearization of North Korea made up of the United States, China, Japan, North Korea, South Korea, and Russia. North Korean officials followed up in April with the assertion that the focus of the negotiations should adjust to regional disarmament talks given its status as a nuclear weapons state. Reports of preparations for a possible nuclear test in April further escalated the sense of urgency. In May, North Korea announced that it had removed 8,000 fuel rods from the Yongbyon reactor for reprocessing; experts estimate that the reprocessed plutonium could provide enough material for an additional six to eight nuclear bombs. Later that month, North Korea launched a short-range missile into the East Sea. After nearly a year without meeting, negotiators from the six nations re-convened in Beijing in late July 2005 for a fourth round of talks. The outcome, a joint statement of principles agreed to in September by all parties, was hailed as a major breakthrough. The key statement committed North Korea to abandoning all nuclear weapons and existing nuclear programs and returning at any early date to the treaty on the proliferation of nuclear weapons and to the International Atomic Energy Agency (IAEA) safeguards. In exchange, North Korea was provided with security assurances; South Korea committed to provide 2 million kilowatts of electricity; and the U.S. and Japan pledged to take steps toward normalization of relations with Pyongyang. A crucial disagreement during the talks involved North Korea's right to develop peaceful nuclear energy programs; as a compromise, the United States and North Korea agreed to discuss Pyongyangs right to such a program and its demand for light-water reactors (LWRs) at an appropriate time. The accomplishment proved to be short-lived, however, as, just a day after the statement was issued, a North Korean spokesman asserted that North Korea would return to the IAEAs Nonproliferation Treaty (NPT) only after it received an LWR from the United States. Secretary Rice dismissed the claim, but the sense of significant progress diminished, and additional talks were not held in 2005. After the Six-Party Talks stalled again, hostile rhetoric between Washington and Pyongyang intensified. Incoming U.S. Ambassador to South Korea Alexander Vershbow labeled North Korea a criminal regime and likened the state to Nazi Germany for its criminal activities. The same week, Jay Lefkowitz, the Special Envoy for Human Rights in North Korea appointed under the North Korean Human Rights Act, visited North Korea and called it a deeply oppressive nation while attending a human rights conference in Seoul. The escalated attacks were met with a torrent of hostile responses from North Korean sources. At a brief reconvening of the Six-Party Talks in November, the counterfeiting issue became the main focus: the North Koreans insisted that the imposition of sanctions on a Macau bank for its alleged role in helping North Korea launder counterfeit U.S. dollars constituted a hostile action that made implementation of the Beijing joint statement impossible. Criticism of North Korea's human rights record became more prominent on the U.S. agenda in 2005. Jay Lefkowitz was appointed as the Special Envoy for Human Rights in North Korea, a position created by the North Korean Human Rights Act of 2004. His public statements on the situation facing refugees and North Korean citizens, paired with a high-profile meeting in the White House between President Bush and a prominent North Korean defector and author, amplified the Administrations concern about North Korea's human rights record. Emphasizing this record drew attention to the gap between the United States and South Korea in dealing with the Norths human rights abuses: in order to avoid provoking Pyongyang, Seoul abstained from voting on resolutions condemning North Korea at the United Nations Commission on Human Rights conference and the United Nations General Assembly meeting in 2005. In addition to human rights, North Korea's criminal activities began receiving heightened attention in late 2005. In September, American officials imposed penalties on Banco Delta Asia, a Macau bank that allegedly allowed the laundering of U.S. dollars counterfeited by North Korea. Noting the chilling effect on the Six-Party Talks, some analysts question the timing of the announcement, but Treasury officials insist that the issue is a law-enforcement activity and in no way related to the multilateral negotiations. South Korea has distanced itself from the U.S. accusations and reiterated its stance that raising such matters causes unnecessary friction with Pyongyang and jeopardizes the resolution of the nuclear issue. China, warned by the United States to crack down on illegal North Korean transaction in its banks, has taken some steps to curb such activity, but U.S. officials say it is unclear how aggressively Chinese authorities are moving. Beijing has also urged Pyongyang not to use the issue as a reason to boycott the Six-Party Talks. In December, the U.S. Treasury Department also put out an advisory warning U.S. financial institutions to be wary of financial relationships with North Korea that could be exploited for the purposes of illicit activities. In August 2005, the North Korean government announced it would no longer need humanitarian assistance from the United Nations, including from the World Food Program (WFP), the primary channel for U.S. food aid. In response, the WFP shut down its operations in December 2005 and the United States suspended its shipments of food aid. North Korea also asked all resident foreigners from the dozen or so aid NGOs operating in Pyongyang to leave the country. In November 2005, Pyongyang decided to reject aid from the European Union (EU) after the EU proposed a U.N. resolution on human rights in North Korea. Part of Pyongyangs motivation appears to be have been a desire to negotiate a less intrusive foreign presence, particularly the WFPs fairly extensive monitoring system. Officially, the North Korean government has attributed its decisions to an improved harvest, the decline in WFP food shipments, a desire to end dependence on food assistance, and its unhappiness with the United States and EUs raising the human rights issue. Apparently, North Korea will continue to accept direct food shipments from South Korea and China, and many have accused these countries with undermining the WFPs negotiating leverage with Pyongyang. China, which provides all of its assistance directly to North Korea, is widely believed to have provided even more food than the United States. Since 2001, South Korea has emerged as a major provider of food assistance, perhaps surpassing China in importance in some years. Almost 90% of Seouls food shipments from 2001-2005 have been provided bilaterally to Pyongyang. Notably, China apparently does not monitor its food assistance, and South Korea has a small monitoring system. Several key officials in charge of U.S. policy toward North Korea were reshuffled in 2005. Critics of earlier U.S. policy were optimistic that Condoleezza Rices confirmation as Secretary of State in January would bring a greater degree of coherence to U.S. policy because of her reputation as one of President Bushs most trusted confidantes. U.S. Ambassador to South Korea Christopher Hill, a career foreign service officer with a reputation as a strong negotiator, was selected to be Assistant Secretary for East Asia and the Pacific, as well as the chief envoy for the Six-Party Talks. As Rice began her post at the State Department, policy analysts studied her language for clues about the U.S. approach to North Korea. During her confirmation hearing, Rice included North Korea among the list of outposts of tyranny, thereby appearing to signal a tough approach to the North. However, her declaration during a March swing through Asia that North Korea was a sovereign state was interpreted as a willingness to negotiate with Pyongyang. Apparently operating with more authority than his predecessor, Hill engaged the North Koreans in bilateral meetings and, eventually, in the Six-Party Talks. Two figures that appeared later in the year, however, were seen by many in the policy community as delivering a more hardline message to the North Koreans: Alexander Vershbow, the incoming U.S. Ambassador to South Korea, and Jay Lefkowitz, Special Envoy for Human Rights in North Korea. (See statements above.) Pyongyang-Seoul relations, though typically moving in fits and starts, overall definitively advanced toward stronger cooperation. Major progress was achieved in developing the Kaesong Industrial Zone, an inter-Korean project of 15 South Korean firms employing about 6,000 North Korean workers. South Korea started electricity flows to firms operating in the zone, located in North Korea territory north of the Demilitarized Zone (DMZ). Tourism numbers ballooned (although all from South Korea to North Korea, and only in controlled areas), and inter-Korean trade topped $1 billion in 2005. Ministerial talks, the first in over a year, were held in June, a military hotline was established, and a variety of negotiations, if not concrete results, on joint river surveys, fishing, farming, and transportation went forward. Significantly, the South Korean Defense White Paper decided not to label North Korea as its main enemy, and instead designated it as substantial military threat. North Korea demanded 500,000 tons of fertilizer from the South, but Seoul officials only provided 200,000 tons because of Pyongyangs refusal to return to the Six-Party Talks. Ties between Washington and Seoul were often strained by the capitals different approaches to North Korea, despite official declarations that they shared the same goal of eliminating North Korea's nuclear weapons program through a diplomatic process. The Roh Administrations public embrace of a framework aimed at balancing the nuclear issue with North-South reconciliation contributed to the impression in many corners that South Korea was asserting a distinctly independent foreign policy stance, sometimes at odds with stated U.S. goals. A disagreement between the U.S. military command in Korea and the South Korean Defense Ministry on the contingency plan, known as OPLAN 5029, to respond to an internal crisis in North Korea, was diffused, if not fully resolved. Despite these tensions, Presidents Bush and Roh held a summits in June and November in which they reiterated their shared strategic goal but declined to work out tactical differences. Indicating a need to strengthen the bilateral relationship, the two leaders announced a new strategic dialogue and the intention to move forward with possible Free Trade Agreement (FTA) negotiations at their meeting preceding the November Asia-Pacific Economic Cooperation (APEC) summit in Busan, Korea. Though the North Korea nuclear issue remains unresolved, China has burnished its leadership credentials as host of the process. Beijing was praised as an effective broker and drafter of the breakthrough joint statement issued at the fourth round of Six-Party Talks. As the party viewed with having the most leverage over Pyongyang, China was called upon to re-engage North Korea after the February 10 announcement that it possessed nuclear weapons. Beijing officials have carefully timed their high-level visits to the Koreas, with an eye on balancing their interests with both. Chinese President Hu Jintaos visit to Pyongyang in October highlighted the consolidation of strong political and economic relations between the nations, and provided a significant counterweight to his visit to Seoul for the APEC summit the following month. Many analysts view Chinas strategy as largely successful in serving its national interests: avoiding major diplomatic crises, preventing the collapse of North Korea, strengthening its economic relations with South Korea, deflecting potential U.S. criticism on other issues such as human rights because of its leverage over North Korea, and enhancing its own reputation as a major diplomatic power. Apart from the dynamics surrounding the on-again, off-again Six-Party Talks, historical issues continued to simmer in Northeast Asia, generally at Japans expense. Early in the year, a dispute over the historical claims to the Tokdo/Takeshima islands, a set of small uninhabited rocks now controlled by South Korea, erupted between Seoul and Tokyo. Most observers saw the controversy as inflamed by domestic politics on both sides; as a result, a relatively minor issue derailed major diplomatic initiatives. Japanese Prime Minister Koizumis fifth visit to the Yasukuni Shrine in October prompted outraged responses from both Beijing and Seoul, and both canceled upcoming summits with Tokyo in protest. Japans attempts at moving the normalization process forward with North Korea also faltered. The appointment of Taro Aso as foreign minister and Shinzo Abe as chief cabinet secretary, both known as conservative figures who support the Yasukuni visits, was viewed by many in the region as an indication of Japans drift toward the right. Regional leaders voiced opposition to Japans bid for a permanent place on the United Nations Security Council. On the whole, Japans relations with the region declined as long-standing historical resentments and ascendant suspicions of Japans intentions hurt bilateral relationships with its neighbors. U.S.-Japan relations, meanwhile, continued to advance as leaders announced a major revamping of the military alliance that calls for Japan to take a more active role in contributing to regional stability. North Korea continued to allow periodic visits by non-Administration officials and specialists; some observers viewed the receptions as part of Pyongyangs strategy of creating divisions and distractions within the U.S. policy community. In January, Representative Curt Weldon led a congressional delegation to Pyongyang. After trying to assure senior North Korean officials that the United States was sincere about wanting to peacefully resolve the nuclear weapons issue, Weldon reported back that North Korea was ready to rejoin the Six-Party Talks. He also revealed that the North Koreans claimed to have nuclear weapons, a claim that later was announced publicly and which contributed to an increase in tension and delayed return to the Talks. High-level North Korean officials also received Selig Harrison, a North Korea specialist known for his pro-engagement views, and impressed upon him that Pyongyang was unwilling to dismantle its nuclear weapons program until the United States moved to normalize relations. This message from the North Koreans reinforced their repeated demand that they receive assurances and assistance at the front end of any exchange, while the United States maintained that any deal was predicated on first the elimination of all nuclear programs in North Korea. Stanford University professor John Lewis and former Los Alamos National Lab Director Sig Hecker also visited Pyongyang and delivered messages about the status of North Korea's nuclear program back to the Administration. Finally, former Clinton Administration official and New Mexico Governor Bill Richardson met with officials in Pyongyang in October in between sessions of the Six-Party Talks. CRS Report RL32743, North Korea: A Chronology of Events, October 2002-December 2004 , by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. CRS Issue Brief IB98045, Korea: U.S.-Korean Relations Issues for Congress , by [author name scrubbed]. CRS Issue Brief IB91141, North Korea's Nuclear Weapons Program , by [author name scrubbed]. CRS Report RL31696, North Korea: Economic Sanctions Prior to Removal from Terrorism Designation , by [author name scrubbed]. CRS Report RS21834, U.S. Assistance to North Korea: Fact Sheet , by [author name scrubbed]. CRS Report RL31785, Foreign Assistance to North Korea , by [author name scrubbed]. CRS Report RL32493, North Korea: Economic Leverage and Policy Analysis , by [author name scrubbed] and [author name scrubbed]. CRS Report RS21391, North Korea's Nuclear Weapons: Latest Developments , by [author name scrubbed]. CRS Report RS21473, North Korean Ballistic Missile Threat to the United States , by [author name scrubbed]. CRS Report RL32167, Drug Trafficking and North Korea: Issues for U.S. Policy , by [author name scrubbed]. DMZ - demilitarized zone dividing North and South Korea DPRK - Democratic Peoples Republic of Korea EU - European Union GNP - gross national product HEU - highly enriched uranium IAEA - International Atomic Energy Agency KCNA - Korea Central News Agency (North Korea's official news agency) KEDO - Korea Peninsula Energy Development Organization NGO - non-governmental organization NLL - Northern Limit Line NPT - Nuclear Non-Proliferation Treaty PRC - Peoples Republic of China PSI - Proliferation Security Initiative ROK - Republic of Korea TCOG - Trilateral Coordination and Oversight Group (United States, Japan, and South Korea)

This report provides a chronology of events relevant to U.S. relations with North Korea in 2005 and is a continuation of CRS Report RL32743, North Korea: A Chronology of Events, October 2002-December 2004, by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. The chronology includes significant meetings, events, and statements that shed light on the issues surrounding North Korea's nuclear weapons program. An introductory analysis highlights the key developments and notes other significant regional dynamics. Particular attention is paid to the Six-Party Talks, inter-Korean relations, key U.S. officials in charge of North Korean policy, China's leadership in the negotiations, Japan's relationship with its neighbors, and contact with North Korea outside of the executive branch, including a Congressional delegation. Information for this report came from a variety of news articles, scholarly publications, government materials, and other sources, the accuracy of which CRS has not verified. This report will not be updated.

On August 22, 2008, Federal Reserve Board Chairman Ben S. Bernanke spoke about systemic risk and raised the issue of having the authority to conduct macroprudential oversight. Similarly, Timothy F. Geithner, while president of the Federal Reserve Bank of New York, also spoke about the need for expanding current prudential supervision of individual financial institutions. Both Federal Reserve officials spoke in the context of growing discussions among academics and central bankers concerning the adoption of a macroprudential policy perspective. Systemic risk may be defined as risk that cannot be avoid ed through diversification. Systemic risk may also be defined in a similar manner to contagion, in which liquidity and payment problems that affect one or a few financial entities will spread and disrupt financial activity more widely in the system. Systemic risk can increase as a result of financial innovation that enhances capital mobility and provides access to additional sources of capital outside of the confines of regulated financial institutions. Although the financial system increases its capacity to provide credit, market expectations grow in importance, which may increase the fragility of the system. Systemic events occur with sudden shifts in the expectations and subsequent reactions of financial market participants. A panic, liquidity disruption, or decline in asset prices may cause sudden and unpredictable reactions by market participants that overwhelm even those regulated financial institutions with sound risk management practices. Consequently, a popular characterization of systemic risk as financial institutions that are "too-big-to-fail" is misleading because it fails to capture the importance of impulsive reactions to various financial events that can be magnified into systemic risk events. Macroprudential supervision or oversight refers to the monitoring of the entire financial system and its vulnerability to systemic risk. Macroprudential oversight arguably complements regulatory structures for individual financial institutions. In addition to monitoring for systemic risk, other tasks fall under the scope of macroprudential oversight. Administrators would be responsible for the development of early warning systems of financial distress, such as a composite index of leading indicators. System-wide stress-testing exercises, which involve introducing some extreme financial disruption into a model of the financial system or various components to evaluate the impact on asset portfolios, would be conducted. Finally, macroprudential policy administrators would also be able to provide advice to other regulatory agencies on matters related to financial stability. This report begins by briefly summarizing how recent innovations in finance, while increasing the capacity to borrow and lend, also resulted in a large volume of banking transactions occurring outside of traditional banking institutions. Monitoring these institutions for safety and soundness, which is referred to as microprudential oversight, does not directly address the challenges posed by systemic risk. Hence, the benefits and limitations of macroprudential policy will be discussed. Financial intermediation is the process of matching borrowers with lenders. The typical intermediation transaction made by banks consists of providing loans to borrowers at higher rates than it costs banks to borrow the funds from savers, who are the ultimate lenders. In other words, long-term loans that banks originate to borrowers are funded by short-term loans made to banks, usually in the form of savings deposits. Banks profit from the spread between the rates they receive and the rates they pay. Banks also earn income from various fees and service charges. The intermediation transaction carries a variety of risks. Banks face the risk of borrower default on the long-term loans. Banks face liquidity and interest rate risks on the short-term funding side of the transaction. Until the long-term loan is fully repaid, banks must continue to attract short-term savers. A bank must continuously be able to roll over or renew its short-term funding (loans) because the funds used to originate the long-term loan have been disbursed to the borrower. It is possible that banks could find themselves low on deposits, perhaps due to a sudden demand for cash or changes in economic conditions. Financial market conditions could also change such that short-term rates rise higher than long-term rates, and continued funding of long-term loans becomes costly. Given the default and funding liquidity risks associated with the intermediation transaction, banks and other financial institutions are always looking for innovative ways to reduce risk, which ultimately facilitates the expansion of intermediation and credit availability. Although the intermediation transaction remains the same conceptually over time, its means of execution has evolved and diversified, which is considered financial innovation. Financial innovations include securitization, growth of the commercial paper market, automated underwriting, derivative markets, and nontraditional mortgage products, which allow the long-term borrower and lender to share the risk of fluctuating long rates. These developments arguably facilitated intermediation in terms of reducing or managing the risks associated with supplying credit, which increased lending capacity. In fact, financial innovation in the mortgage market during the 1990s arguably enhanced homeownership by reducing loan origination costs and increasing the array and variety of mortgage products that could be offered to borrowers. Such financial innovation also allowed aspects of the intermediation transactions to occur outside of what is considered traditional banking institutions. For example, some businesses, rather than obtaining traditional short-term loans from depository institutions, may issue their own debt in the form of commercial paper. Commercial paper issuances are typically unsecured, short-term promissory notes or bonds that investors (savers) can hold in their portfolios and, upon maturity, roll the proceeds into newer commercial paper issuances. Hedge funds, pension funds, and other financial entities may decide to purchase long-term, less liquid assets with funds obtained from their issuances of commercial paper. The commercial paper is the liability of the issuing firms, and the long-term assets (loans) acquired were not funded by liabilities (deposits) of a traditional depository institution. Securitization is another example of a financial innovation that allowed aspects of the intermediation transaction to occur off bank balance sheets. Securitizers are entities that purchase long-term loans, then use the payment streams to create short-term securities (similar in nature to commercial paper with a variety of risk-return options) to investors, which fund the loan purchases. During the 2000s, many subprime loans were originated by non-bank lenders that did not hold deposits. These loans were then funded via the securitization process with funds raised from commercial paper or similar issuances. Consequently, intermediation transactions were no longer limited to taking place inside traditional banks; they could now occur in the broader financial markets. A microprudential regulatory approach focuses on the safety and soundness of individual financial institutions. This regulatory approach monitors lending by supervised institutions and attempts to encourage prudent behavior. Microprudential regulators evaluate bank data against Basel I and II capital ratios and CAMELS rating criteria. The objective of microprudential oversight is to increase the protection of the deposits in these institutions. The microprudential approach to regulation, however, cannot completely prevent bank failures. The market value of bank assets or loans can suddenly decline with sudden increases in unemployment, which is indicative of future repayment problems, even though the loans were prudently originated before the shift in local financial conditions. This vulnerability applies especially to small banks whose loans are tied to the local economy. Larger banks may be less susceptible to regional economic conditions if they are geographically diversified, but they remain vulnerable to systemic risk, which falls outside the scope of microprudential regulation. Financial innovation may expand the financial system such that more intermediation transactions can take place outside of more traditional banking institutions, but the risks have not disappeared. The risks, rather than being borne by a particular institution, are spread among a multitude of financial market participants. Furthermore, the transfer of risk to financial markets may increase the interconnectivity among all financial market participants, causing the entire financial system to be vulnerable to unanticipated payments disruptions or sudden declines in asset values. For example, suppose banking institutions used derivatives instruments to reduce the default and interest rate risks associated with the intermediation transaction. These instruments would have transferred these risks to another counterparty, perhaps outside of the banking system, willing to sell protection against such risks. If, however, the counterparty finds itself having to make higher than anticipated payments following some unforeseen event, all financial market participants may question the ability of other market participants to repay commitments. Such erosion of confidence may be considered systemic and have harmful consequences on other participants even though only one counterparty was late or completely defaulted on a payment. Hence, the transfer of risk led to an increase in the interconnectivity of financial market participants. Moreover, microprudential oversight, which is limited to the regulation of the risk management practices of individual institutions, would not eliminate the systemic risk in this scenario largely because financial market expectations are impossible to regulate. Central banks are generally tasked with "lender-of-last-resort" responsibilities to ensure that regulated depository institutions reliably have access to short-term loans. This access ensures that healthy but illiquid banks continue funding long-term loans without disruption. Under a traditional banking model where regulated institutions originate long-term loans and fund them with short-term deposits, a central bank may assist banks in a short-term funding crunch, perhaps because of a bank run, as part of its normal course of activities. Consequently, central banks may be considered systemic risk managers for supervised banks, and they have typically been involved in macroprudential policy oversight, even if that role has not been formalized by legislation. Macroprudential oversight structures have typically been set up inside of central banks. H.R. 4173 , the Wall Street Reform and Consumer Protection Act of 2009 (Representative Barney Frank), proposes to establish a Financial Services Oversight Council (FSOC), which would consist of the heads of the federal financial regulatory agencies, to provide macroprudential oversight of the U.S. financial system. A formal approach to macroprudential oversight arguably complements existing microprudential oversight to reduce systemic risks. Suppose an agency conducting macroprudential oversight were to ask microprudential supervisors to require increased transparency for a specific intermediation activity from their supervised institutions. Disclosure of such information to the entire financial system may increase overall confidence. Furthermore, if such policy actions were taken under normal conditions when financial markets are not in distress, then implementation may be more likely to boost rather than erode the confidence of financial market participants. H.R. 4173 would require the FSOC to facilitate information sharing and coordination among its members with respect to financial services policy development, rulemakings, examinations, reporting requirements, and enforcement actions. A regulatory body specifically tasked with macroprudential oversight would try to guard against bubbles and overleveraging. The regulator would also monitor stress-testing activities as well as the extent to which financial market participants are becoming more interconnected by risks. When asset values are rising, the balance sheets of financial institutions are likely to appear healthier. Financial institutions may decide to increase their lending in such an environment. As long as financial institutions maintain capital risk ratios at or above safety thresholds, the increase in lending activity would still fall within the guidelines of safety and soundness set by microprudential oversight. A rise in asset market prices, however, may be indicative of a speculative bubble. An agency responsible for macroprudential oversight may warn or even attempt to curtail the level of risk taking activity when related asset prices appear to rise rapidly at what may be considered an unsustainable pace. The macroprudential objective would be to build up safety buffers during good times that can be used as a cushion during unstable times. A limitation or drawback of macroprudential policy is its countercyclical nature, which means the policy impact will dampen business cycle activity and restrain the economy during boom times. As stated in the previous example, procyclical microprudential policy would be less likely to curtail lending activities for banking institutions when collateral asset values are rising. Macroprudential administrators, however, may perceive rising asset prices as evidence of a bubble and call for banks to raise capital or reduce lending. Although this macroprudential response may help reduce the likelihood or impact of a systemic risk event, it may also restrain short-run banking profits, economic activity, and economic growth. Consider the debate about the existence of a housing market bubble. The substantial decline in mortgage interest rates during the 1990s, resulting in part from securitization reducing the funding costs of lending, helped lower the cost of homeownership relative to renting. Changing demographic trends also affected changes in housing demand. On the other hand, the rise in home prices and use of mortgage credit levels was interpreted by some as evidence of a bubble in the housing market. Consequently, it would have been problematic to determine with certainty whether the rise in the demand for homes, which would be reflected in house price increases, was due to a rise in underlying fundamentals or speculative behavior, since both occurred simultaneously. Even when the market is characterized by speculation, speculative trading helps to provide liquidity for assets. Speculation increases the number of transactions, which makes it easier to price and sell assets. Hence, identifying bubbles would still present a challenge for macroprudential oversight. Not only would it be difficult to determine how much financial market activity would be the result of speculation, but it would also be difficult to determine how much speculation can be reduced without compromising overall asset market liquidity. Furthermore, as financial markets become more globalized, it becomes more challenging for a macroprudential regulator in one country to track and influence global expectations. Despite the problems of identifying and managing speculative behavior, macroprudential regulators would be tasked with responding to conditions that suggest the presence of a bubble given the systemic risks to financial markets when it deflates. A macroprudential response, however, may be at odds with other policy goals in which the primary focus is not safety and soundness. Some policy goals are aimed at increasing credit access to low and moderate income households and households living in underserved areas. It may be easier for financial institutions to facilitate more lending to those individuals covered by policy goals at times when collateral assets are rising and there is expanded lending capacity. Macroprudential oversight, however, might encourage a reduction of lending at a time when asset values are rising and financial conditions would be better suited to facilitate the achievement of other policy goals. A macroprudential oversight regulator may also find itself in the middle of occasional conflicts between regulators. For example, consider a case that occurred in the mid-1990s. A regulator concerned with the adequate capitalization of banks preferred that banks adopt conservative accounting practices that would result in the reporting of higher loan loss allowances. Higher loan loss allowances would indicate the ability of banks to avoid severe financial distress when unexpected loan losses occur. Another regulator, concerned with the accurate reporting of income to investors, preferred adoption of accounting practices that would reduce the reported amount of loan-loss allowances. Overstatement of loan loss allowances reduce bank net income and retained earnings on paper. Investors may interpret large loan-loss allowances as evidence of high-risk lending practices, which may reduce bank profitability, and that could translate into a decline in the bank's value or stock price. In addition, a reporting of higher loan-loss allowances may result in an initial understatement of assets and overstatement of bank income in future periods, which would translate into overly optimistic information being reported to investors in subsequent periods. A macroprudential regulator may be more inclined to support regulations that foster increased safety and soundness. Given that regulators can always require banks to provide any critical information, such disputes may be settled in favor of investor needs. If, in the particular case above, a regulator responsible for macroprudential oversight combined efforts with the regulator in favor of more conservative accounting practices, the collective efforts possibly may have had a greater influence on the outcome. In H.R. 4173 , the FSOC would be given the task of resolving disputes that might arise among federal financial regulatory agencies.

Recent innovations in finance, while increasing the capacity to borrow and lend, resulted in a large volume of banking transactions occurring outside of traditional banking institutions. Also, even though existing regulators supervise individual banks for safety and soundness, there are risks that do not reside with those institutions but may still adversely affect the banking system as a whole. Macroprudential policy refers to a variety of tasks designed to defend the broad financial system against threats to its stability. Responsibilities include monitoring the system for systemic risk vulnerabilities; developing early warning systems of financial distress; conducting stress-testing exercises; and advising other regulatory agencies on matters related to financial stability. H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009 (Representative Barney Frank), establishes a Financial Services Oversight Council with macroprudential regulatory responsibilities. On March 22, 2010, the Senate Banking Committee ordered reported the Restoring American Financial Stability Act of 2010 (Senator Christopher Dodd), which also would establish a Financial Services Oversight Council with similar responsibilities. This report provides background and discusses the potential benefits and limitations of macroprudential policy efforts. This report will be updated as events warrant.

The current dispute, as discussed above, has its origins in the 1960s. The new chapter of thislong running discussion is primarily the result of events that have occurred since the Fall of 2004.First, Delta Airlines decided in October 2004 to pull most of its service out of Dallas- Ft. WorthInternational Airport (DFW). Next, DFW asked Southwest Airlines to consider operating longdistance flights out of DFW. Southwest rejected the DFW offer and instead announced in November2004 that it intended to seek legislative relief from the Wright/Shelby Amendments. Thisannouncement ended what was regarded as a long standing truce on this issue between Southwestand DFW. Since November, DFW, joined by other parties such as American Airlines (American),have lobbied extensively in favor of retaining the existing Wright/Shelby restrictions on airlineoperations at Love Field. Southwest, and others, have, at the same time, presented their ownarguments as to why these restrictions should be removed. This section of the report will discuss the major claims and counterclaims made by each sidein this discussion. The subjects chosen for examination are those most frequently discussed in publicforums on this subject. (48) Additional background information will also be detailed toprovide a context for these discussions. Until very recently there has been a minimal level of public interest in this issue outside ofthe Dallas-Ft. Worth area. A few articles about the Wright/Shelby Amendments have appeared inthe national press since last November, but they have been few and far between. The aviation tradepress has taken a slightly greater interest, but here too the treatment of the issue dwells primarily onthe local aspects of the issue. The Dallas-Ft. Worth region is served by one large hub airport, DFW, and one medium hubairport, Love Field. (49) Respectively they rank 4th and 55th nationally in terms of total passenger enplanements. In FY2003,DFW enplaned 24.6 million passengers while enplanements at Love Field stood at around 2.8million. Commercial aircraft operations totaled 751,546 versus 126,313 respectively during thesame period. (50) Both airports are important components of the regional economy. Each airport can claim tobe the home of one of the nation's 10 largest airlines, with American based at DFW and Southwestbased at Love Field. American is the nation's largest airline having an almost 18% share of the U.S.market in February 2005. (51) Southwest, which controls about 7.5% of the U.S. market, is thenation's most profitable airline, being one of a very small number of airlines that has remainedprofitable throughout the post-September 11th period. Southwest had revenues of $6.5 billion in2004 and a net profit of $313 million. For the same period American had revenues of $18.6 billionand a net loss of $761 million. (52) American is clearly the dominant air carrier at DFW. In 2003, just over 71% of allpassengers at DFW boarded American and American regional air carrier flights (17,990,193enplanements). (53) Delta, and Delta regional carriers, accounted for about a 17% share of DFW traffic (4,314,445enplanements). The next largest major air carrier share was United Airline's 2%. At Love Field,Southwest had a market share of almost 97% in 2004 (2,945,588 enplanements). (54) Continental Expressaccounted for most of the remaining 3% of passengers. There are no other significant air carriercompetitors at the airport at this time. As can be seen from the above, most of the airline traffic in the regional market is controlledby a small number of air carriers. There are some major differences affecting how these air carriersoperate in the current marketplace, however. Southwest is the most successful air carrier in the era since deregulation of the industry in1978. It has been corporately based in Dallas for its entire existence. It has also been profitable formost of its existence, which is a rather unique situation in the U.S. airline industry. It has done thisby offering low, or lower, fares, while at the same time maintaining relatively low operating costs.Southwest is the prototypical low cost carrier (LCC) and its operating structure has been imitatedat least to some degree by many new air carriers formed since deregulation (imitating Southwest hasnot guaranteed success, however). For much of the 1980s, Southwest was primarily viewed as aniche carrier with an uncontested regional market based out of Love Field. During the later 1980sand especially in the 1990s, Southwest has expanded dramatically with a route system that becamenational in scope. Southwest does not operate hub-and-spoke service, hence Love Field is notreferred to as a hub. Rather, Southwest operates primarily as a point-to-point air carrier. Becausethe Wright/Shelby Amendments limit direct service from Love Field to 7 states, it has not beenpossible for Southwest to compete directly with DFW-based air carriers in many major nationalairline markets. This does not mean that Southwest travelers originating in Dallas have been unableto reach other Southwest cities such as Baltimore. A passenger can reach these destinations, butcannot be through ticketed and must change planes at some other destination such as New Orleans. Over time, Southwest has faced very limited competition at Love Field. At the present timethe only other airline providing service from the airport is Express Jet, which is a ContinentalAirline's affiliate. All of this service is between Love Field and Houston Bush International. Becauseof the regional air carrier exemption to the Wright/Shelby Amendments, any service beyond the 7state restriction must be performed by an aircraft with 56 seats or less. The now defunct LegendAirlines unsuccessfully tried to provide service to multiple national destinations in the late 1990s.No airline provides such service at present. American Airlines is one of the nation's oldest air carriers. It is one of the air carriers knownin industry parlance as a legacy carrier. It operates international service from DFW and otherlocations, and operates multiple hubs - Chicago, Miami, and to a lesser extent New York. FromDFW, American can take a passenger almost anywhere in the world on a single ticket. It providesservice to most major U.S. cities either on American aircraft or on affiliated American regional aircarriers. American was not originally headquartered at DFW, having moved there from New Yorkafter the airport was completed in the mid-1970s. Like most other legacy air carriers, American haslost money consistently since September 11th. At some points in the 1990s and 1980s, however, itwas one of the most financially successful of U.S. air carriers. Delta has a history similar in many respects to that of American. Its corporate base isAtlanta. Its now reduced foray into DFW met with limited success initially, but, especially sinceSeptember 11th, it has consistently lost money at the airport, according to industry analysts. Otherair carriers at DFW serve the airport primarily as a feeder to their own hub-and-spoke systems, e.g.United service to Chicago or Denver, Continental service to Houston. DFW has sought to encourageservice to the airport by other LCC air carriers such as Airtran and Jet Blue. Airtran has a growingpresence at the airport, but is not yet viewed as a replacement air carrier for Delta's lost service. Delta Airlines maintained a hub at DFW airport for some years, but as can be seen from themarket share figures discussed above, it was dramatically smaller than its American counterpart. InOctober 2004, Delta announced that it was restructuring system-wide in order to stave off abankruptcy filing. Delta announced its intention to cut up to 7,000 jobs, reduce wages, close its DFWhub, and make major operating changes throughout the remainder of its system. Its DFW hub, nowclosed, ended operation earlier this year. Delta continues to provide service at the airport, thoughat a much more modest level: 21 departures per day versus the 258 departures per day in October2004. In its new configuration, Delta now uses 4 gates at the airport versus the 28 it previouslyoccupied. Since deregulation began in 1978 there have been several instances in which more than oneairline tried to operate a hub at the same airport. In most instances these multiple airline hubs, forexample, Miami and St. Louis, have either become single airline hubs (Miami) or stopped beinghubs altogether (St. Louis). A very few multiple airline hubs still exist, e.g. Chicago O'Hare andAtlanta Hartsfield Jackson. Many airline industry observers believed from the establishment of itshub at DFW that Delta would be unable to compete with American on its home turf. They expected,correctly, that Delta would eventually scale down or abandon its hub at DFW. Delta's withdrawal comes at what the airport views as an inopportune time. DFW is currentlyconstructing/completing several major capital projects, including a new international terminal ($1.09billion) and a new internal people mover system ($885 million). In total, its ongoing capitalimprovement program will cost $2.7 billion and raise airport debt levels to $3.8 billion. Delta'spresence had been an important part of DFW's decision to initiate its capital improvement programand Delta's landing fees and other related revenues were expected to make a major contribution topaying off the bond issues floated to pay for the improvements. DFW now expects that thewithdrawal of Delta will decrease its revenue stream by $50 million annually and that it will needto find new revenues to compensate for this loss in order to avoid problems paying off its debts. In January 2005, DFW announced that it would provide significant financial incentives foran air carrier willing to initiate new service at the airport and take over at least 10 of the gates madeavailable by Delta's departure. These incentives included a year's free rent on airport facilities andup to $22 million in other aid. To date there have been no takers. DFW contends that Southwest'smove to eliminate the Wright/Shelby Amendments is a major reason for this situation. DFWcontends that no carrier is currently willing to take a gamble until there is some certainty about thefuture of the Wright/Shelby Amendments. DFW's argument could explain some of the reluctance of new carriers to locate at the airport,but does not take into consideration other factors that might be more important in the market at themoment. The current financial state of the airline industry makes it almost impossible for all but afew LCCs to significantly expand service to new airports. At the moment, no legacy airline is knownto be contemplating the creation of a new hub. LCCs, as mentioned earlier, do not normally createhubs. The DFW argument also fails to fully acknowledge American's competitive position at theairport. American has always been a fierce competitor and is likely to remain one, its financialproblems notwithstanding. There are not many airlines who are willing to compete head-to-headwith American's well established hub at the airport, especially when they have other options. There are a number of major cities that have more than one major airport successfullyoperating in relative proximity to each other. Examples include Chicago, New York, Los Angeles,San Francisco/Oakland/San Jose, Washington/Baltimore, and Houston. Southwest contends that thisnational experience could easily be replicated in the Dallas Ft.Worth region and that any negativeeffects on DFW of increasing flights out of Love Field would be of relatively short duration asregional growth continued to create new opportunities for both airports. DFW goes to some length in its briefing materials to argue that the Houston model inparticular would be a bad model for the Dallas-Ft. Worth region. DFW argues that it alreadyprovides more service out of DFW alone than Houston does out of two airports. It also argues thatits fares are as low, and in some cases are lower, than those prevalent in the Houston region. Again,DFW repeats the argument that it would be inefficient for the region's resources to be split betweentwo airports. DFW Initiated Work. As part of its presentationon why the Wright/Shelby amendments need to be retained, DFW hired economists at the Universityof North Texas to perform an economic analysis of what the Delta hub closure means to the airportand the local economy. (55) The specific findings of this analysis are that the Delta pulloutwill result in a $782 million per year decrease in regional economic activity, the loss of more than7,000 jobs, a decrease in wages and salaries of $344 million per year, an annual loss of tax and otherrevenues collected by state and local governments of $58 million, and, in 2005, a $35 million lossto the airport as a result of diminished landing fees, concession fees, etc. The authors conclude theirassessment by stating that: ...the airport will be severely pressed to fill the 24 gatesleft vacant by Delta. Given Southwest Airlines' decision not to move flights to DFW, and thereluctance of other discount carriers to serve DFW with Southwest making noises about expandingservice from Love Field, it may be many years before DFW's gates and terminals are fullyutilized. (56) The type of economic analysis utilized by the authors, input-output analysis, is a standard toolemployed to show the benefit or loss that might accrue to a community as a result of some sort ofaction. For example, new stadium and other large public works project proposals are frequentlyaccompanied by economic analyses of this type. It is not uncommon for opponents of stadiums, etc.to hire their own economists to provide an alternative view using the same basic methodology,which, as will be seen in the next section, is the situation here. As is sometimes the case, the assumptions that go into the input-output process are oftenquestioned. For example, some of the observations in the report, while sounding quite dramatic,are much less so when put in the perspective of the greater regional economy. The Dallas-Ft. Worthregion had total wage and salary disbursements in 2003 of $116.4 billion. (57) This represents a year overyear increase of $524 million, or roughly a 0.5% increase over the previous year's level. The $344million in wages and salaries associated with Delta's pullback equates to less then 3/10ths of onepercent of total local salaries and wages. Less than eight months' growth in the regional economyat current growth rates would, therefore, overshadow the regional effects of Delta's departure(individuals and businesses, however, may continue to suffer from the pullout for a much longerperiod). DFW commissioned a second study by aviation consulting firm SH&E that focuses on howaviation activity in the region might change as a result of repeal of the Wright/Shelby amendments. The study does not express its findings in dollar terms, but rather tries to demonstrate that repealwould redistribute air service in a manner that would be bad for DFW and for the regional economy. This second study works from the premise that Southwest would greatly expand its activity at LoveField to major destinations outside of the seven states to which service is currently restricted undertwo growth scenarios. (58) The study, assuming a worst case outcome from the perspective of DFW, presents several majorfindings, among these are: that air traffic at Love Field could triple, (59) that international trafficat DFW would be reduced, that the number of domestic destinations served from DFW would alsobe reduced, and that DFW would lose up to 35% of its annual passengers. Against this backdropSH&E comes to the conclusion that the best option for the region would be the retention of theWright/Shelby amendments because it would concentrate future aviation growth at DFW whereinfrastructure is readily available. Otherwise SH&E predicts DFW would be underutilized withsignificant financial implications for the region, which at the same time might need to pay forexpensive new public infrastructure at Love Field. There are many assumptions in the SH&E study that can be questioned, which is the normalsituation for a study of this type. One assumption open to question is the prediction that Americanand other DFW-based airlines can only compete with Southwest successfully by moving and/orcreating new service at Love Field. Although certainly possible, this would seem to be in conflictwith the experience in other multi-airport metropolitan areas where airlines successfully competeusing different airports. Southwest Airlines Initiated Work. Southwesthas contracted for its own study of the effects of repealing the Wright/Shelby amendments. Thestudy by the Campbell-Hill Aviation Group takes a very different approach from the DFW initiatedstudies. (60) Campbell-Hill contends that the Wright/Shelby amendments impose an economic penalty on NorthTexas of $2.4 billion and on the nation as a whole of $4.2 billion. This penalty, in the view of thestudy's authors, is the result of limited competition at DFW that results in above market fares tomany destinations. The figures in the study are derived from a detailed regression analysis thatassumes that Southwest would be able to compete in 15 city-pair markets from which it is currentlyexcluded. A Southwest able to compete in the regional market, it is assumed, will offer lower faresin these city-pairs then those currently available at DFW from American or other airlines. The studyalso assumes that lower fares will attract considerable new airline traffic to North Texas and thateach visitor will have a positive economic for the region as a whole. There are of course several issues that a study of this type cannot and is not designed toanswer. For example, the study does not discuss the issue of offsetting investments in new infrastructure that might accrue to facilitate this increased traffic, especially at Love Field. American Airlines Initiated Work. AmericanAirlines' has also commissioned a study supporting the DFW position. (61) The study, done by EclatConsulting, suggests that the Southwest supported Campbell-Hill study is flawed and considerablyoverstates the regional benefits of increased Southwest service at Love Field. Eliminating theWright/Shelby restrictions would, also in this view, cause significant changes in American's DFWhub system and lead to reduced/eliminated service to numerous small cities and some internationaldestinations. As with the other studies mentioned above, the authors of this report made a numberof assumptions as a basis for analysis. Primary among them in this case is that American wouldmove a significant amount of service from DFW to Love Field. All of the above mentioned studies provide insights into the relative merits and demerits ofrepealing the Wright/Shelby amendments. None, however, give a complete picture and each is builton assumptions that can and will be called into question. DFW is legitimately concerned that it will have a tough time paying off its bondedindebtedness if it loses airline service as a result of a Wright/Shelby restriction repeal. It is, asdiscussed earlier, a principal argument made by the airport for retention of the restrictions. Whetherthese effects would be short-term or long-term in nature, however, is debatable. Also debatable iswhether DFW's potential financial plight vis-a-vis Love Field should be a matter of congressionalconcern. In the last two decades numerous airports have seen large reductions in air service. In someinstances the reductions were far greater then what appears to be the case at DFW. Several airports,for example, have lost a hub carrier. Atlanta and Miami both went through some rough times afterthe collapse of Eastern Airlines. Indianapolis is currently dealing with the loss of ATA as a majorpresence at the airport. Many other examples could be detailed. The experience in each case hasbeen similar. There have been no major bond failures at any of these airports. In most majormarkets, replacement air carriers, or growth by the incumbent air carrier, has over time, restored theairport to economic health. In light of the experience of other cities, DFW would not be expected toexperience serious long-term economic repercussions as a result of the dynamic nature of theDallas-Ft. Worth regional marketplace. In the short-term, however, DFW may go through some hardtimes. The biggest threat to the financial health of DFW is the long-term financial health ofAmerican Airlines. American is not just the largest air carrier at the airport, its route system and itsfuture aspirations are largely the rationale for much of the infrastructure at the airport. As suggestedabove, the move of a significant number of American flights to Love Field would hurt DFWfinancially. An American business failure would have much more serious repercussions. It couldbe argued, therefore, that DFW's campaign to save the Wright/Shelby Amendments is as muchconcerned with protecting American's market position as it is with trying to retain its overallpreeminent position in the North Texas aviation market. And from the airport's perspective this isa common sense position. A 2001 Master Plan adopted by Love Field limits service to 34 gates, and makes no plansfor runway or other airside expansion. Love Field is physically constrained by surroundingdevelopment that includes several residential neighborhoods. Noise issues are important to the localcommunity and noise concerns played an important role in the adoption of the Master Plan. Southwest contends that its potential expansion of service at Love Field can be easily handledwithin the context of the Master Plan. Further, they contend that their fleet of relatively quiet Boeing737-700 aircraft ensures that increased noise will not be a factor in any ramp-up of service.Southwest has consistently stated that it welcomes new competitors at the airport, so long aseveryone has to abide by the same rules. Unclear, however, is how a relaxation of the Wright/Shelby Amendments might play outamongst Southwest's competitors. American has suggested that termination of the existingrestrictions would force them to open a hub at Love Field as a competitive response. (62) American perceives,possibly correctly, that it could lose significant amounts of Dallas originating traffic if Southwestwere able to provide national service from the downtown airport without direct competition.American currently owns three gates at Love Field although it does not use them. At this point it isfar from clear whether American could in fact create a parallel, but smaller hub operation at LoveField. By their own admission, serving two airports in close proximity would be inefficient. Sucha move could certainly have at least short-term negative financial implications for DFW. So far, no other major air carrier has publicly stated an intention to serve Love Field ifrestrictions are withdrawn. Many industry observers would question the idea that some carrier wouldwant to go head-to-head with Southwest on its home turf. More likely is that additional airlinesmight wish to add regional or even large jet service at the airport to serve their own hub-and-spokeor point-to-point route systems. American contends in its statements that it views the Love Field Master Plan as moot in theevent of a Wright/Shelby repeal. This is not a view shared by either Southwest or the City of Dallas. It is likely that this issue would become very important locally in the event that the Amendmentswere repealed. As mentioned above, there is considerable sensitivity in the surroundingcommunities to increased noise and other activities at and around the airport. As a result, theremight be considerable local opposition to the increase in airport activity that might accompanyAmendment repeal. The large populations of American and Southwest employees in the region, by itself, almostguarantees that this subject will generate considerable local debate. It is not surprising, therefore,that regional opinions appear to be mixed. A perusal of the websites created by DFW and Southwestto promote their respective positions details local support for both protagonist's positions. (63) Local newspapers havealso weighed in on the subject, providing extensive coverage of the debate over Wright/Shelby. (64) Again, coverage wouldseem to indicate that broad consensus on the question of repeal is absent. Local politicians are also weighing in on the subject. Notably, the Mayor of Dallas nowseems to be seeking an as of yet undefined compromise on the issue. (65) In addition, Members of the region's congressional delegation are weighing in on the subject, withtwo Members supporting repeal and several others opposing the idea. In the 108th Congress, several members of the Tennessee congressional delegation introducedlegislation that would have allowed direct air service between Love Field and airports in Tennessee( H.R. 5187 ). The bill received no further congressional consideration. Comparablelegislation has now been introduced in the 109th Congress ( H.R. 2932 , RepresentativeMarsha Blackburn, June 16, 2005). The bill has been referred to the House Committee onTransportation and Infrastructure, Subcommittee on Aviation. At this point no further action on thelegislation has been taken. Legislation that would repeal the Wright/Shelby Amendments has been introduced in the109th Congress ( H.R. 2646 , Representative Jeb Hensarling, May 26, 2005). Thislegislation has also been referred to the Subcommittee on Aviation. No further action on thelegislation has been taken. As of this writing, three pieces of legislation have been introduced in the Senate that wouldimpact the Wright/Shelby Amendments. The first of these would have the practical effect ofeliminating the existing restrictions, but does so, not by repealing the Wright/Shelby Amendments,but by amending the existing provisions to include the 43 states not currently named in theAmendments as allowable service points (Puerto Rico is also added)( S. 1424 , SenatorJohn Ensign, July 19, 2005). A second bill, opposed to lifting the Wright/Shelby restrictions, wouldrequire the closure of Love Field three years after the date of enactment ( S. 1425 ,Senator James Inhofe, July 19, 2005) (66) . A final piece of legislation is a provision in the Senate-passedversion of the Transportation, Treasury, the Judiciary, Housing and Urban Development, and RelatedAgencies Appropriations Bill, 2006 ( H.R. 3058 as amended, October 20, 2005). Thisprovision would appear to permanently add Missouri to the existing list of states eligible for directservice to Love Field. The Senate Committee on Commerce, Science and Transportation has scheduled a November10, 2005 Hearing on the Love Field dispute. It is unclear whether action, other then on theappropriations bill, will be take on any of these bills during the remainder of the 1st Session of the109th Congress. It is unknown whether the Senate appropriation's provision concerning Love Fieldwill survive, or be modified by, the Conference Committee considering the legislation. In its November 2005 announcement, Southwest contended that H.R. 5187 inthe 108th Congress clearly showed a desire on the part of Congress to expand direct service to LoveField beyond the 7 states allowed service by the Wright/Shelby Amendments. Southwest believesthat the legislation introduced in the 109th Congress, excluding S. 1425 , bolsters thisposition. Southwest also contends that the departure of Delta from the regional market provided aneed for additional service in the market, especially low fare service, and that with relief from theWright/Shelby restrictions, Southwest is in the best position to provide it. DFW, obviously, takes a very different view. From their perspective, Southwest should either offer long distance service from DFW, or live with the Wright/Shelby Amendmentrestrictions. Giving Southwest authority to fly beyond the seven states it can now serve would, intheir opinion, have a chilling effect on DFW's ability to attract new air carriers to replace Delta. Byextension, such a move could also diminish the economic vibrancy of the airport and the region(Love Field, in this view, is not seen as a regional asset, but rather as a Dallas City asset). The DFW arguments are primarily couched in the politics, legalities, and history of theregional compact that created the airport that are discussed more fully earlier in this report. Therationales for retaining the Amendments are primarily of local interest and origin, e.g. protectinginvestments and markets at DFW. Many industry observers, including some outside the Dallas/Ft.Worth region, believe that Wright/Shelby repeal or modification is a local issue, and should bedecided in the context of local aviation needs. Since its 1978 deregulation, the airline industry has become very competitive. Airlines moveservice in and out of airports as their marketing strategies change. This is mostly done irrespectiveof the financial and other needs of the airports they serve. There are still a few other airports withoperating restrictions; Reagan Washington National and New York La Guardia are the two mostcommonly mentioned. But the restrictions in each instance are far less constraining than they areat Love Field, and the reasons for these restrictions are completely unrelated to those at issue here. The rationale for removing Wright/Shelby restrictions, therefore, is the rationale for deregulation inthe first place: the unrestricted flow of air commerce. A question for policymakers, then, is shouldthe exceptions to deregulation that are the Wright/Shelby Amendments be retained in the context ofthe existing national aviation system or should local concerns be the primary determinant as to thedesirability of repeal and/or modification?

The history of the Wright Amendment dates back to the 1960s when the now defunct CivilAeronautics Board (CAB) proposed the creation of a single regional airport in the Dallas-Fort Worth(DFW) area. To construct the new airport, the two cities entered into an agreement that required thephasing out of separate existing airports in Dallas and Ft. Worth and transferring air service to thenew DFW Airport, which opened in 1974. During this time, Southwest Airlines began operating outof Dallas's Love Field as a purely intrastate air carrier. As such, Southwest was not subject to CABregulation. Congress's subsequent passage of the Airline Deregulation Act of 1978, resulted inSouthwest being allowed to operate interstate flights from Love Field, and prompted concerns frommany local officials about DFW's financial stability. The Wright Amendment represents a compromise that was designed to protect the interestsof both DFW Airport and Southwest Airlines. The Wright Amendment contains a generalprohibition on interstate commercial aviation to or from Love Field subject to exceptions thatpermits Southwest's continued operations in a regional four state market. In addition, the ShelbyAmendment, enacted in 1997, further expands the scope of the regional market to three additionalstates, but nevertheless retains the basic compromise and structure of the original WrightAmendment. The language of the Wright Amendment has been the focus of several administrativeinterpretations by the Department of Transportation, as well as litigation at both at the state andfederal level. Each court decision to date has affirmed the DOT's interpretation of the WrightAmendment. The newest iteration of this long running issue is primarily the result of events that haveoccurred since the Fall of 2004. First, Delta Airlines decided in October 2004 to pull most of itsservice out of Dallas Ft. Worth International Airport (DFW). Next, DFW asked Southwest Airlinesto consider operating long distance flights out of DFW. Southwest rejected the DFW offer andinstead announced in November 2004 that it intended to seek legislative relief from theWright/Shelby Amendments. This announcement ended what was regarded as a long standing truceon this issue. In the period since November, DFW, joined by other parties such as AmericanAirlines, have lobbied in favor of retaining the existing Wright/Shelby restrictions on airlineoperations at Love Field. Southwest, and others, have, at the same time, presented their ownarguments as to why these restrictions should be removed. The DFW arguments are primarily couched in the politics, legalities, and history of theregional compact that created the airport. The rationales for retaining the Amendments are primarilyof local interest and origin, e.g. protecting investments and markets at DFW. The rationale forremoving the restrictions is the rationale for deregulation in the first place, the unrestricted flow ofair commerce. A question for policymakers then is should the exceptions to deregulation that are theWright/Shelby Amendments be retained in the context of the existing national aviation system?Legislation affecting the Wright/Shelby restrictions has been introduced in the 109th Congress; H.R. 2932 , H.R. 2646 , H.R. 3058 , H.R. 3383 , S. 1424 , and S. 1425 . This report will be updated as warranted by events.

Congress and President Bush devoted considerable attention to how the nation can best prevent, prepare for, respond to, and recover from natural and human-caused disasters. Events such as the terrorist attacks of September 11, 2001, and Hurricane Katrina of August 2005, prompted Congress and President Bush to require the development of a plan for how government at all levels, and also the nongovernmental sector, should respond to all types of emergencies and disasters. Pursuant to statutory requirements and presidential directives, the Federal Emergency Management Agency (FEMA), an agency located within the Department of Homeland Security (DHS), issued such a plan in March 2008 with publication of the National Response Framework (NRF). The NRF is the end product of a long history. Prior to the terrorist attacks of September 11, 2001, the structure for responding to emergencies and disasters resided in at least 5 separate plans. With the Homeland Security Act of 2002 ( P.L. 107-296 ) and Sections 15 and 16 of the Homeland Security Presidential Directive 5 (hereafter HSPD-5), Congress and President Bush directed DHS to consolidate these plans and create a single, overarching, integrated, and coordinated national response plan, and to develop a National Incident Management System (NIMS). These efforts culminated in the initial National Response Plan (NRP) on October 10, 2003, followed by the release of NIMS on March 1, 2004. In August 2005, Hurricane Katrina made landfall, followed shortly by Hurricanes Rita and Wilma. A number of studies on the responses to these hurricanes found shortcomings in the NRP itself and its implementation. DHS made the decision to revise the NRP partially based on these reports. The revision of the NRP was also due to mandates in the Post-Katrina Emergency Management Reform Act of 2006 ( P.L. 109-295 , hereafter the Post-Katrina Act). In January 2008, DHS issued the NRF, which took effect in March 2008. Since that time, the NRF has been the nation's core response document, providing a structure for the response to such disasters as the 2008 Midwest floods and California wildfires, as well as Hurricanes Gustav and Ike. This report reviews selected statutory provisions related to the NRF and provides an overview of the document. It discusses some of the reasons the Bush Administration revised the NRP, as well as some controversial aspects of the review process. The report also summarizes selected pending legislation concerning national response planning and concludes with a discussion of issues over which Congress might consider exercising oversight. Authority for the creation of the NRF emanates from numerous sources. FEMA has described the NRF as being guided by 15 "principal emergency authorities," 48 other statutory authorities and regulations, 17 executive orders, and 20 presidential directives. This report does not offer an exhaustive overview of these authorities. Rather, this section discusses some of the major authorities establishing the NRF, legislation that shaped the development of the NRF, and legislation tied to congressional oversight. The Robert T. Stafford Disaster Relief and Emergency Assistance Act (hereafter the Stafford Act) establishes the programs and processes by which the federal government provides emergency and major disaster assistance to states and localities, individuals, and qualified private nonprofit organizations. Section 611 of the Stafford Act authorizes the Director of FEMA to prepare federal response plans and programs and to coordinate these plans with state efforts. Consistent with this authorization, FEMA released the Federal Response Plan in April 1992. The primary purpose of the Federal Response Plan was to maximize the availability of federal resources to support response and recovery efforts taken by state and local emergency officials. After the terrorist attacks of September 11, Congress passed the Homeland Security Act of 2002 ( P.L. 107-296 ). Subsection 502(6) required the consolidation of "existing federal government emergency response plans into a single, coordinated national response plan." The Homeland Security Act also created DHS, consolidating over 20 agencies, including FEMA, into a single department. Under DHS, FEMA retained both its authority to administer the provisions of the Stafford Act and its designation as the lead agency for the nation's response plan. On February 28, 2003, President Bush issued HSPD-5. Section 16 of HSPD-5 directed the Secretary to develop and submit for review to the Homeland Security Council a national response plan. Section 16 also mandated that the plan use an "all-discipline" and "all-hazards" approach in preparing for, responding to, and recovering from domestic incidents. In December 2004, through the primary guidance and authorization of the Stafford Act, the Homeland Security Act, and HSPD-5, DHS issued a successor to the Federal Response Plan , which was entitled the National Response Plan (NRP). The NRP was in place and implemented for the Hurricane Katrina response in August 2005. The problems that arose from Hurricane Katrina prompted numerous studies. Some of these studies attributed the poor response, in part, to the implementation of the NRP. Concerned by perceived deficiencies in the NRP, Congress sought a remedy through legislation in the Post-Katrina Act. The Post-Katrina Act provides the most comprehensive legislation concerning the NRP (or any subsequent plans) by mandating numerous adjustments to the NRP as well as mechanisms for oversight. Section 642 amended the Stafford Act and the Homeland Security Act to mandate that the President develop a national preparedness system. Section 643 further establishes that the President shall, through the Administrator of FEMA "complete, revise, and update, as necessary, a national preparedness goal... to ensure the Nation's ability to prevent, respond to, recover from, and mitigate against natural disasters, acts of terrorism, and other man-made disasters." It further states that the national preparedness goal, to the extent possible, should be consistent with NIMS and the NRP. Section 649(b) of the Post-Katrina Act requires that the national preparedness goal, NIMS, and the NRP be subjected to clear and quantifiable performance measures to ensure they are continuously revised and updated. Section 652 of the act establishes annual reporting requirements concerning preparedness capabilities. Section 652(c) requires the reporting of state compliance with the NRP. Finally, Section 653 requires the president to ensure that federal agencies assigned with responsibilities in the NRP have the capability to meet the national preparedness goal, and develop plans to "respond effectively to natural disasters, acts of terrorism, and other man-made disasters in support of the National Response Plan to ensure a coordinated federal response." In response to the Post-Katrina legislation and perceived problems with the implementation of the NRP, DHS revised the plan and issued the NRF. The following section describes the various components of the document. The NRF is part of a national strategy for homeland security. It provides the doctrine and guiding principles for a unified response from all levels of government, and all sectors of communities, to all types of hazards regardless of their origin. Although the primary focus of the NRF is on response and short-term recovery, the document also defines the roles and responsibilities of the various actors involved in all phases of emergency management. The NRF is not an operational plan that dictates a step-by-step process for responding to hazards. Rather, the NRF appears to be an attempt to build flexibility into response efforts by setting up a framework that DHS believes is necessary for responding to hazards. Within this framework, the NRF gives users a degree of discretion as to how they choose to respond to the incident. The NRF is organized into five parts. The introductory chapter presents an overview of the entire document and explains the evolution of the NRF, and identifies the various actors involved in emergency and disaster response. The chapter also discusses the concepts undergirding emergency preparedness and response by providing a list of what DHS describes as the "five key principles" of response doctrine. The first chapter of the NRF, entitled "Roles and Responsibilities," provides an overview of the roles and responsibilities of federal, state, and local governments, the nonprofit and private sectors, and individuals and households. The first chapter also discusses the roles and responsibilities of those who hold various positions within these entities. The second chapter, entitled "Response Actions," describes and outlines key tasks as they pertain to what DHS calls the "three phases of effective response." These phases include "prepare," "respond," and "recover." Preparing includes planning, organizing, equipping, training, exercising, and conducting evaluations. Activities related to responding include gaining and maintaining situational awareness, activating and deploying resources and capabilities, coordinating response actions, and demobilizing. "Recover" activities are broken down into two broad categories. These are short-term and long-term recovery. The third chapter of the NRF, entitled "Response Organization," discusses the organizational structure and staffing used to implement response actions, all of which are based on NIMS and ICS. The NRF describes the organization and staffing structure of every entity responsible for preparedness and response in detail. The fourth chapter, entitled "Planning," describes the process of planning as it pertains to national preparedness and summarizes planning structures relative to the NRF. The chapter describes the criteria for successful planning and offers example scenarios for planning. The fifth and final chapter of the NRF, entitled "Additional Resources," describes the 15 Emergency Support Function (ESF) Annexes to the NRF, eight Support Annexes, and seven Incident Annexes. These annexes are listed in Table A-1 and Table A-2 of this report. The final chapter also explains that the NRF and its annexes are posted online through the NRF Resource Center, which allows for ongoing revisions to the document. As mentioned earlier in the report, several studies attributed the problematic response to Hurricane Katrina partly to the implementation of the NRP. Although the NRP was used for smaller emergencies and disasters prior to Hurricane Katrina, the hurricane marked the first time the NRP was used for a catastrophic incident. The section that follows discusses how some of the changes in the NRF have addressed these criticisms. The NRP was widely criticized as complicated and overly bureaucratic. Some said it was long and weighed down with technical language. Additionally, users of the NRP reported that the document failed to clarify roles and responsibilities and that the federal chain of command was confusing. It was further pointed out that the name "National Response Plan" was a misnomer (and hence misleading) because it was not a true operational plan in the sense that it did not provide a step-by-step process for responding to an incident. The NRF uses less technical language than the NRP, and attempts to make the roles and responsibilities more transparent. The NRF is also shorter. Whereas the NRP contained over 400 pages, the NRF is roughly 80 pages. Still, some have contested the clarity of the NRF. This will be discussed in greater detail later in the report. Despite efforts to make the NRP a nationwide response plan, the NRP was widely seen as not sufficiently national in its focus because it emphasized federal preparedness and response. Some have further argued that the process of creating the plan excluded nonfederal stakeholders, such as states and localities. According to DHS, the NRF more clearly articulates the roles and responsibilities of nonfederal entities. Additionally, when drafting the NRF, DHS held outreach sessions to solicit the feedback of nonfederal partners. The extent of nonfederal participation in the creation of the NRF has been questioned and is discussed later in this report. Several emergencies and disasters have taken place since implementation of the NRF. In general, responses to the NRF have been mixed. Some have indicated that its implementation has been successful. One observer stated that coordination among federal, state, and local governments has improved. In the case of Hurricanes Gustav and Ike, officials in Texas related that the federal response to the hurricanes was good. Other officials have been ambivalent regarding implementation of the NRF, noting that the scale of recent disasters has not warranted enough federal involvement to understand how well the NRF works. A review of various reports may hint at some problems, however. For instance, during Hurricanes Gustav and Ike, state officials in Texas said it was the local government's responsibility to set up distribution points for supplies. However, the local government claimed it was unaware of this responsibility. Such confusion may indicate that the NRF still does not clearly articulate the roles and responsibilities of state and local governments during emergencies and disasters. Other, more serious criticisms of the NRF have surfaced since its implementation. A report issued by the Inspector General of DHS stated that some of the decisions made by FEMA during the response to Hurricane Ike did not adhere to certain principles set forth in the NRF. The following section discusses these in greater depth and highlights issues Congress might examine or policy options it might consider. One frequent criticism of the NRF is the ambiguity surrounding the relationship and role of the Federal Coordinating Officer (FCO) and the Principle Federal Officer (PFO). The FCO determines the types of relief most urgently needed, establishes field offices, and coordinates relief efforts. The FCO position is authorized by the Stafford Act. Immediately upon declaring a major disaster, Section 302(a) of the Stafford Act requires the President to appoint an FCO. The PFO, on the other hand, is not a legislatively authorized position. Rather, the PFO position was created by DHS in the NRP. The PFO is designated by the Secretary of DHS, represents the Secretary as the leading federal official, and serves as the primary point of contact for state and local officials. During Hurricane Katrina, Michael Brown, who was serving as the Director of FEMA, was additionally designated as the PFO. William Lokey served as the FCO for Louisiana. To some observers (such as the Inspector general for DHS), these roles created a great deal of confusion during Hurricane Katrina, because it appeared that two people were in charge of the relief operations. Despite criticisms of the position, DHS made the decision to retain the PFO in the NRF. The decision spurred congressional concern prompting several attempts to clarify or abolish the PFO position. For example, Section 526 of the Consolidated Appropriations Act, 2008 ( P.L. 110-161 ) states that "none of the funds provided by this or previous appropriations Acts shall be used to fund any position designated as a Principal Federal Official for any Robert T. Stafford Disaster Relief and Emergency Assistance Act declared disasters or emergencies." Persistent congressional oversight and legislative efforts may have resolved the issue. In a hearing before the Subcommittee on Economic Development, Public Buildings, and Emergency Management Committee on Transportation and Infrastructure FEMA Administrator Craig Fugate stated that DHS has determined that the PFO position would not be used for an emergency or major disaster under the Stafford Act and that planning and response documents were in the process of being updated to reflect that decision. A criticism of the NRP was that input from nonfederal stakeholders, such as state and local governments, nonprofit groups, and the private sector, was poorly integrated into the document. Congress addressed this issue in Section 653 of the Post-Katrina Act, where Congress required DHS and FEMA to develop operational plans with state, local, and tribal government officials. According to a GAO report, DHS initially included nonfederal stakeholder input in the creation of the NRF, but later "deviated" from the process. Rather than disseminating the first draft of the NRF to stakeholders, DHS conducted an internal review of the document. GAO found that the issuance of a later draft to nonfederal stakeholders was delayed, reducing the amount of time for the stakeholders to respond with comments on the draft. Additionally, GAO reported that DHS failed to establish FEMA's National Advisory Council (NAC) by the December 2006 deadline that was set forth in Section 508 of the Post-Katrina Act. According to the act, the NAC is responsible for incorporating the input of state, local, and tribal governments and the private sector in the development and revision of the NRF. The importance of meeting the congressional mandate has been addressed by one analyst. Donald Kettl, a public policy professor at the University of Pennsylvania, has emphasized the importance of including local officials in the planning process. According to Kettl, "no amount of national planning can side-step the fact that ... the first indicator that something bad is happening is a report from the frontlines." In consideration of these conclusions, some may argue that failing to integrate feedback from local emergency officials could (1) omit hazards that are known at the local level but not recognized by federal officials, (2) miss an opportunity to integrate the lessons learned from local responders who have first-hand experience with emergencies and disasters, and (3) fail to establish "buy-in" to the plan at the state and local level thereby creating a possible reluctance to execute the plan faithfully. If the issue of nonfederal stakeholder input were of concern to Congress, it might move to conduct oversight on the extent to which DHS and FEMA are utilizing the NAC and incorporating nonfederal stakeholders in all aspects of national emergency planning and revision. In testimony before the House Homeland Security Subcommittee on Emergency Preparedness, Science and Technology, one emergency professional pointed out that there is a gap in the level of emergency readiness between adult and pediatric care. He noted that children are more vulnerable to hazardous materials than adults, have unique treatment needs, and require care from providers who have been specifically trained to meet these needs. The witness stated, however, that federal, state, and local efforts in disaster planning have generally overlooked the unique needs of children. Separately, Mark Shriver, Vice President and Managing Director of Save the Children's U.S. Programs, has stated that children are vulnerable during emergencies and evacuations. According to Shriver, the needs of children are commonly overlooked before, during, and after a disaster. Shelters, for example, often have unsanitary conditions, and many communities lack sufficient stockpiles of diapers, formula, pediatric medications, and child-size respirators. In various legislative provisions, Congress has focused on the needs of children during disasters. For example, the Post-Katrina Act contains a provision to reunite children with their families by establishing, within the National Center for Missing and Exploited Children, a new National Emergency Child Locator Center. Congress addressed the subject again in the Consolidated Appropriations Act, 2008. Division G, Section 603 of the act establishes the National Commission on Children and Disasters. The purpose of the Commission is to conduct a comprehensive study to examine and assess the needs of children during disasters and submit a report to the President and Congress. Under the NRF, the needs of children are addressed in ESF #6 and #13. The support of children's needs in ESF #6 is delegated to several nonprofit organizations, including Catholic Charities, Feed the Children, Save the Children, and the United Methodist Committee on Relief (UMCOR). One of the functions of ESF #13 is to protect children. Under the annex, the National Center for Missing and Exploited Children (NCMEC), a private sector organization, is responsible for preventing child abduction and sexual exploitation, and helping locate missing children. Congress might consider how well the issue of child protection in disasters is addressed in the NRF annexes. Several observations about the NRF's current coverage include the following. First, there are no primary agencies designated as responsible for addressing children's needs. Only supporting agencies have this designation. Second, some may argue that the annexes are flawed because the Public Health and Medical Services Annex (ESF #8) and Search and Rescue Annex (ESF #9) do not explicitly mention children in their various functions. Third, some may argue that having multiple annexes focused on the needs of children may create service gaps, and that when several organizations are assigned with responsibility, it becomes unclear what agency will take the lead, and what functions these agencies are carrying out. In addition, they may argue that having multiple organizations creates unnecessary duplication. Having the NRF available online appears to have some benefits. Emergencies and disasters are fluid events and having a document capable of adapting to the needs created by unique emergencies and disasters would seem to add a degree of flexibility to the NRF. It also gives users easy access to the document. Users can also sign up for email alerts to be informed of changes in the NRF. However, it is unclear what mechanisms are in place to ensure users who visit the website infrequently, or do not sign up for alerts, are informed of NRF modifications or changes. Is it possible that a state or locality may use protocols that have been removed or revised? The NRF is always in effect, whereas the NRP had to be invoked when an emergency or disaster struck. According to DHS, this has the benefit of speeding response time because it eliminates the need to wait for some form of announcement that the plan is in effect. Some may argue that a plan that is always in effect lacks a triggering mechanism to alert responders and create situational awareness. Does the NRF benefit response activities by always being in effect? The Post-Katrina Act requires the Administrator of FEMA to submit to Congress annual reports that identify the resources needed to enhance regional offices and undertake planning, training, surge capacity, and logistics. Reporting must also include information about state compliance with the NRF and the extent to which the use of federal assistance during the preceding fiscal year achieved preparedness priorities. Additionally, homeland security grants require broad state compliance with national preparedness policy. Some may argue that emergency management practices are strengthened when states and localities adopt federal standards for emergency preparedness and response. Others may argue that mandating compliance has at least two negative consequences. First, not all states have the same set of hazards. A one-size-fits-all approach may not be the best method of addressing hazards, because states and localities are better positioned to make decisions about how to conduct emergency planning and response. Second, requiring compliance and creating standards increases federal involvement in emergency policy. Again, some may argue this is beneficial, because it can help save lives and reduce property loss, but others might argue that the requirements infringe on state sovereignty. Incident Annexes in the NRF are primarily oriented toward terrorism. Since Hurricane Katrina, some have argued that there has been an emphasis on planning for high-impact, low-probability incidents at the expense of low-impact, high-probability incidents. Additionally, it is possible that planning for terrorism underemphasizes preparedness for natural disasters. For example, in testimony before the House Natural Resources Committee, David Applegate pointed out that earthquakes are among the most expensive of natural disasters in terms of destruction. According to Applegate, this underscores the importance of preparedness and mitigation; however, there is no Incident Annex addressing earthquakes. Concern over a potential earthquake on the New Madrid fault line has persuaded officials to use an earthquake scenario for the 2011 National Level Exercise in Arkansas. An earthquake annex could be used to guide the exercise and assess response capabilities. The President of the International Association of Emergency Managers (IAEM) and Director of Emergency Management, Hillsborough County, Florida, also addressed the terrorism emphasis. Director Larry Gispert responded favorably to President-elect Obama's plan to support first-responders, prepare effective emergency response plans, improve interoperable communications systems, and work with state and local governments and the private sector, and allocate funds based on risk. Gispert objected to plans that focus on terrorism because state and local emergency managers primarily deal with natural disasters. According to Gispert, the plan would have the benefit of allowing state and local governments to prepare for both types of incidents rather than predominantly terrorism. On the other hand, others would argue that planning for terrorism is of the utmost importance and that a terrorist attack would have the same consequences as a natural disaster. They may conclude that planning and preparedness for terrorism can be applied toward natural disasters and therefore fits the all-hazards model of emergency management. If Congress were concerned about the possibility that preparedness for natural disasters is being hampered by overemphasizing terrorism in emergency plans, or that resources for natural disaster preparedness are being diverted to prepare for terrorist events, Congress may elect to have FEMA develop natural disaster annexes, or incorporate more natural disaster planning in existing Incident Annexes. In response to directives from Congress and the President, the Bush Administration issued the NRF to establish a new approach to coordinate federal and nonfederal entities in times of emergencies and major disasters. The NRF does appear to respond to some of the challenges identified by Congress and others. The document is more concise, has less jargon, and has made an attempt to clarify roles and responsibilities. Additionally, anecdotal reports following Gustav and Ike indicate the coordination of emergency activities among federal, state, and local governments has improved. On the other hand, parts of the NRF may have retained some of the problems associated with the NRP. The NRF still contains the PFO arrangement, terrorism and natural disasters are not given equal treatment, and nonfederal stakeholder input appears to be lacking. Some may contend that insufficient implementation studies have been conducted on the NRF to assess its efficacy. Others might argue the NRF has yet to be tested by a large-scale disaster to form a clear picture of its effectiveness; the only way to find out whether the NRF is an improvement over the NRP may be to subject it to a major catastrophe comparable to Hurricanes Andrew or Katrina.

In response to the terrorist attacks of September 11, 2001, Congress and President Bush moved to consolidate numerous federal emergency plans into a single, unified national response plan. The end product of these efforts was the National Response Plan (NRP), which established broad lines of authority for agencies responding to emergencies and major disasters. Perceived problems with the implementation of the NRP during Hurricane Katrina led Congress to enact the Post-Katrina Management Reform Act (P.L. 109-295) to integrate preparedness and response authorities. The legislation directed DHS to issue a successor plan to the NRP entitled the National Response Framework (NRF). Implemented in March 2008, the NRF establishes a new approach to coordinating federal and nonfederal resources and entities. The Department of Homeland Security (DHS) maintains that the NRF is an improvement over the NRP. Some, however, assert that the NRF is not an improvement because it does not fully address the problems and challenges associated with the NRP. This report discusses how national response planning documents have evolved over time and describes the authorities that shape the NRF. Several issue areas that might be examined for potential lawmaking and oversight concerning the NRF are also highlighted. This report will be updated as significant legislative or administrative changes occur.

M edicaid is a joint federal-state program that finances the delivery of primary and acute medical services, as well as long-term services and supports, to a diverse low-income population, including children, pregnant women, adults, individuals with disabilities, and people aged 65 and older. Medicaid is financed jointly by the federal government and the states. Federal Medicaid spending is an entitlement, with total expenditures dependent on state policy decisions and use of services by enrollees. State participation in Medicaid is voluntary, although all states, the District of Columbia, and the territories choose to participate. States are responsible for administering their Medicaid programs. States must follow broad federal rules to receive federal matching funds, but they have flexibility to design their own versions of Medicaid within the federal statute's basic framework. This flexibility results in variability across state Medicaid programs. Most Medicaid beneficiaries receive services in the form of what is sometimes called traditional Medicaid--an array of required or optional medical assistance items and services listed in statute. However, states also may furnish Medicaid in the form of alternative benefit plans (ABPs), referred to in the Social Security Act as benchmark or benchmark-equivalent coverage. Congress originally provided for ABPs in the Deficit Reduction Act of 2005 (DRA 2005; P.L. 109-171 ) to give states flexibility to provide a Medicaid benefit that more closely resembles commercial health insurance than traditional Medicaid does. Congress modified the ABP provisions in subsequent legislation, both by expanding the scope of states' service obligations in furnishing Medicaid through ABPs and by requiring that most Medicaid beneficiaries who first became eligible as a result of the Medicaid expansion in the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended) receive ABPs as their mandatory form of Medicaid coverage. This report answers frequently asked questions about Medicaid ABPs. The Appendix provides a glossary and abbreviations of selected terms. In general, under Medicaid, states are required to provide a comprehensive set of services to all categorically needy individuals, with some exceptions. The required Medicaid services are listed in the definition of medical assistance in the Social Security Act (SSA) and include a wide array of services and items, such as physician services; inpatient and outpatient hospital services; and services and items under the early and periodic screening, diagnostic, and treatment (EPSDT) benefit for individuals under the age of 21. Medical assistance also includes certain optional services--that is, services that states can choose whether to provide under their state plans--including routine dental services, prescription drug coverage, and care furnished by physical or speech therapists, among others. Among the broad federal requirements that apply to Medicaid benefit coverage, the federal law contains requirements relating to statewideness and comparability, meaning that in general, the scope of Medicaid mandatory and optional benefits must be the same statewide and the services available to the various Medicaid eligibility groups (with limited exceptions) must be equal in amount, duration, and scope. ABPs, which are referred to in Section 1937 of the SSA as benchmark or benchmark-equivalent coverage, were introduced as a form of Medicaid coverage in DRA 2005. One key difference between ABPs and traditional Medicaid benefits is that ABP coverage is defined by reference to an overall coverage benchmark that is based on one of three commercial insurance products or a fourth, "Secretary-approved" coverage option rather than as a list of discrete items and services. ABP coverage meets the requirements in DRA 2005 if (among other requirements) it either corresponds precisely to a benchmark plan selected by the state from options listed in the law or qualifies as benchmark-equivalent because the ABP has an aggregate actuarial value equivalent to the selected benchmark benefit package and meets various other requirements in the statute. A second major difference between ABPs and traditional Medicaid benefits is that states can choose to furnish ABP coverage to specific state-selected subgroups of Medicaid beneficiaries as their mandatory form of Medicaid coverage, notwithstanding the comparability and statewideness requirements. States can even design different ABPs for different beneficiary subgroups. States are nonetheless prohibited from requiring various high-needs subcategories of Medicaid beneficiaries from receiving Medicaid through ABPs. The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA 2009; P.L. 111-3 ) and the ACA with its implementing regulations made significant changes to the ABP requirements, relating both to the scope of benchmark and benchmark-equivalent coverage and to the populations that may be required to receive Medicaid through ABPs. Those changes are described below. SSA Section 1937 does not refer to alternative benefit plans; instead, it refers to benchmark or benchmark-equivalent coverage. The Centers for Medicare & Medicaid Services (CMS) introduced the term alternative benefit plan in lieu of those terms in the preamble to a July 2013 regulation. CMS decided to refer to the Medicaid benchmark and benchmark-equivalent plans as ABPs in an effort to prevent confusion regarding the term benchmark, which is used in both the SSA's Medicaid regulations and private health insurance market regulations. Although the term is used in both contexts, the benchmarks used for purposes of SSA Section 1937 ABPs and for purposes of the private health insurance market are different. In the private insurance market, CMS regulations implementing ACA requirements concerning the provision of essential health benefits (EHBs) in the individual and small-group markets use the term base-benchmark to refer to the specific health insurance plan selected by a state to determine the scope of its EHB package, in keeping with federal EHB benchmark plan guidelines. The following types of health insurance coverage constitute benchmark coverage for purposes of Medicaid ABPs (ABP benchmark options): The standard Blue Cross / Blue Shield preferred provider option service plan offered through the Federal Employees Health Benefit Program (FEHBP)-equivalent health insurance coverage. The health benefits coverage plan offered to state employees. The commercial health maintenance organization (HMO) with the largest insured commercial, non-Medicaid enrollment in the state. "Secretary-approved coverage." The fourth ABP benchmark option, Secretary-approved coverage, can be any health benefits coverage that the Secretary of Health and Human Services (HHS), upon application by a state, determines provides appropriate coverage for the proposed population. Notably, Secretary-approved coverage may correspond to the Medicaid state plan benefit package offered in the state. Alternatively, states may design and seek CMS approval for benchmark-equivalent coverage, which is coverage that a state seeks to offer as an ABP that does not correspond precisely to one of the four ABP benchmark options listed above. Benchmark-equivalent coverage must meet statutory requirements including the following: The coverage must include benefits within each of the following categories: inpatient and outpatient hospital services; physicians' surgical and medical services; laboratory and x-ray services; prescription drugs; mental health services; well-baby and well-child care, including age-appropriate immunizations; and other appropriate preventive services. The coverage must have an aggregate actuarial value equivalent to one of the ABP benchmark options. If the benchmark-equivalent coverage includes vision or hearing services, the coverage for these services must have an actuarial value that is at least 75% of the actuarial value of the coverage in that category for the benchmark plan used to measure aggregate actuarial value. The coverage included in a Medicaid ABP, in addition to qualifying as benchmark or benchmark-equivalent according to the standards described above, must meet other requirements. Some of these requirements were included with the original ABP provision in DRA 2005; others were added in CHIPRA 2009 or the ACA and its implementing regulations. The requirements are the following: Beneficiaries under the age of 21 enrolled in ABPs are entitled to the EPSDT benefit, just the same as if they were receiving traditional Medicaid benefits. EPSDT may be furnished through ABP coverage or through traditional Medicaid, as a wraparound benefit, whereby supplemental services are offered to meet the EPSDT level of coverage. Coverage under an ABP must include federally qualified health center services and rural health clinic and associated ambulatory services. Coverage under an ABP must include at least the EHBs, which non-grandfathered individual and small-group plans in the private health insurance market are required to furnish. , If coverage under an ABP includes both medical and surgical benefits and mental health or substance use disorder (SUD) benefits, then the financial requirements and treatment limitations that apply to the mental health and SUD benefits must comply with the mental health parity requirements described in the Public Health Service Act. Coverage under an ABP must include family planning services and supplies for individuals of childbearing age to the same extent that such services would be covered under traditional Medicaid. Under Medicaid regulations, if a benchmark or benchmark-equivalent plan does not include medically necessary ambulance and nonemergency medical transportation services, the state must nevertheless ensure that these services are available to beneficiaries enrolled in an ABP as a wraparound benefit. In general, states are allowed to provide additional benefits, beyond those required by the law, under an ABP. The Medicaid state plan is a document comprehensively describing a state's Medicaid program. States must administer their Medicaid programs in keeping with the state plan for the state to receive federal financial participation in Medicaid expenditures. States establish ABP coverage by amending their Medicaid state plans. CMS provides a state plan amendment "preprint," on which states provide detailed information, including the populations to be covered via ABPs, which benchmark benefit package the state selected and whether it is offering benchmark or benchmark-equivalent coverage, which base benchmark the state selected as the basis for providing the EHBs, and the scope of coverage of each of the 10 categories of EHBs. For each EHB category, the state must indicate in the state plan amendment any benefits the state has elected to substitute in lieu of those provided for in the base benchmark plan, as well as any additional benefits the state has elected to provide. A state must file a Medicaid state plan amendment not only when initially establishing an ABP but also each time it seeks to modify substantially an existing ABP, such as by adding or removing a beneficiary group receiving Medicaid through ABPs or altering the scope of ABP coverage. States must require individuals who are eligible for Medicaid as a result of the ACA Medicaid expansion (the ACA Medicaid expansion population ) to receive Medicaid through ABPs. Attaching consequences to this requirement, the ACA limited federal financial participation in Medicaid expenditures for the ACA expansion population to expenditures for coverage under ABPs. With respect to other non-ACA Medicaid expansion population eligibility groups, states have the option to require enrollment in ABP coverage, with the exception of some eligibility groups, as explained below. States may impose on individual beneficiaries the requirement to enroll in ABPs only on a group-by-group basis, based on the categorically needy eligibility groups. In SSA Section 1937, Congress waived the application of the statutory comparability requirement (SSA SS1902(a)(10)(B)) to ABPs. This means that states may require one or more Medicaid eligibility groups to receive Medicaid in the form of ABPs. A state also may design different ABPs tailored to different eligibility groups. Only full benefit eligibles (FBEs) may be required to receive Medicaid through ABPs. Medicaid beneficiaries are FBEs if they have been determined eligible to receive the standard full Medicaid benefit package under the state plan, if not for the application of the ABP option. The term FBE excludes partial-benefit Medicaid beneficiaries, such as those who receive Medicaid only in the form of Medicare cost sharing and/or premiums. The term also excludes medically needy individuals and other spenddown populations--Medicaid beneficiaries who have income that exceeds applicable income limits and qualify for a limited package of Medicaid benefits by using medical expenses to spend down excess income. States are prohibited from requiring some categories of Medicaid beneficiaries to receive Medicaid via ABPs even if they otherwise qualify as FBEs. The categories of ABP-exempt beneficiaries include the following: pregnant women who qualify for Medicaid as a result of having household income below 133% of the federal poverty level (FPL); individuals who qualify for Medicaid on the basis of being blind or disabled, including members of the "Katie Beckett" eligibility group (certain children under the age of 19 who require an institutional level of care and receive home- and community-based services); individuals entitled to Medicare benefits; terminally ill individuals receiving hospice benefits under Medicaid; individuals who qualify for Medicaid institutional care on a spenddown basis; individuals who qualify as medically frail; individuals who qualify for long-term care services (including nursing facility services and home- and community-based services); individuals who qualify for Medicaid because they are children in foster care or are former foster care children under the age of 26; parents and caretaker relatives whom the state is required to cover under Section 1931 of the SSA; women who qualify for Medicaid based on breast or cervical cancer; those who qualify for Medicaid on the basis of tuberculosis infection; and noncitizens who receive Medicaid only in the form of a limited emergency medical assistance benefit. For purposes of the medically frail category above, states have some discretion in defining the term. According to the implementing regulations, the definition must include at least (1) certain special-needs children; (2) individuals with disabling mental disorders, chronic substance use disorders, or complex medical conditions; (3) individuals with physical, intellectual, or developmental disabilities that significantly impair their ability to perform one or more activities of daily living; and (4) individuals with a disability determination based on the Supplemental Security Income program or Medicaid state plan criteria. States may offer ABP-exempt beneficiaries the option of enrolling in an ABP. If a state chooses this option, it must inform the exempt individual of the benefits available under the ABP and the costs under the ABP and provide a comparison of how they differ from the costs and benefits under traditional Medicaid. The law contains a tension concerning the ACA Medicaid expansion population insofar as it intersects with ABP-exempt beneficiary groups . States are prohibited from using federal funding to provide Medicaid to the expansion population other than through ABPs; at the same time, the ACA Medicaid expansion population may include ABP-exempt individuals, who by law cannot be required to enroll in an ABP. CMS addressed this issue in the implementing regulations by defining the term ABP-exempt beneficiaries to exclude members of the ACA Medicaid expansion population . The regulations also required states to give any member of the ACA Medicaid expansion population who otherwise would qualify as ABP-exempt the option to enroll in an ABP "that includes all benefits available under the approved state plan." The most significant way the ACA expanded the existing ABP requirements was by requiring that ABP coverage include at least the EHBs, as defined in Section 1302(b) of the ACA. The content of the EHBs and the process for states to meet EHB requirements through their ABP state plan amendments are described below. The ACA also added a requirement that, to the extent that coverage under an ABP includes both medical and surgical benefits and mental health and substance use disorder benefits, the entity offering the ABP must ensure that the financial requirements and treatment limitations applicable to these benefits comply with the mental health parity requirements added to the Public Health Service Act (PHSA) by the Mental Health Parity and Addiction Equity Act of 2008. Additionally, the ACA added a requirement that where a state elects to provide benchmark-equivalent coverage rather than benchmark coverage, the benchmark-equivalent coverage must include coverage of prescription drugs and mental health services. Finally, the ACA added a requirement that any coverage provided through ABPs (i.e., either benchmark or benchmark-equivalent coverage) must include coverage of family planning services and supplies for individuals of childbearing age. The ACA required all non-grandfathered health plans in the individual and small-group private health insurance markets to offer a core package of health care services, known as the essential health benefits (EHBs). The ACA required the HHS Secretary to define the EHBs, with the following limitations. First, the EHBs are required to include the following general categories of items and services: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. In addition, by statute, the EHBs are required to be equal in scope to the benefits provided under a typical employer plan, as determined by the HHS Secretary. The HHS Secretary implemented the EHB requirements for the individual and small-group private health insurance markets not by establishing the EHBs at the federal level but by requiring each state to select a coverage benchmark based on existing employer-sponsored or commercial insurance--an approach very similar to the one set forth in SSA Section 1937 for ABPs. Each state must begin from a base-benchmark option to establish its EHBs for the individual and small-group health insurance markets. Through plan year 2019, the base-benchmark options are similar, but not identical, to the benchmark options for Medicaid ABPs under SSA Section 1937. The EHB base-benchmark options are (1) the largest health plan by enrollment of any of the three largest small-group insurance products in the state; (2) any of the largest three employee health plan options offered to state employees in the state; (3) any of the largest three national FEHB program plan options offered to all health-benefits-eligible federal employees; or (4) the plan with the largest insured commercial non-Medicaid enrollment offered by an HMO operating in the state. The state must supplement the base-benchmark, if needed, to ensure the EHB package includes benefits in each of the 10 categories listed above. The resulting standardized set of health benefits that must be met by each plan is referred to as the EHB-benchmark plan . Starting in plan year 2020, states may choose to change their EHB-benchmark plans by doing any one of the following: (1) using the entire EHB-benchmark plan that another state used for plan year 2017; (2) using another state's 2017 EHB-benchmark plan to replace one or more EHB categories in its 2017 EHB-benchmark plan; or (3) "otherwise selecting a set of benefits that would become the State's EHB-benchmark plan." Per regulations finalized in April 2018, as of plan year 2020, a state's selected EHB benchmark plan still must be at least equal in scope to a typical employer plan but also "[must] not exceed the generosity of the most generous among a set of comparison plans," as listed. In their Medicaid state plan amendments establishing or amending an ABP benefit, states must identify both the ABP benchmark benefit package selected (for purposes of determining whether the coverage qualifies as benchmark or benchmark-equivalent) and the EHB base-benchmark package selected. If the ABP benchmark selected is the same as the EHB base-benchmark and includes services from all 10 EHB benefit categories, then the plan is deemed to cover the EHBs. Where the EHB base-benchmark differs from the ABP benchmark, and the base-benchmark lacks an EHB category, the state must supplement the ABP to include the missing category. The state is allowed to substitute benefits that are included in the ABP benchmark or benchmark-equivalent package for actuarially equivalent benefits of the same benefit type in the same category of EHB. For example, within the "rehabilitative and habilitative services and devices" category, if a state's ABP benchmark package includes speech therapy but not occupational therapy, whereas its EHB base-benchmark package includes the latter but not the former, the state may elect to furnish speech therapy instead of occupational therapy, so long as the benefits are actuarially equivalent. ABP coverage is not required to be provided using Medicaid managed care. Even though the various benchmark options on which the coverage is built (with the exception of "Secretary-approved coverage") are commercial or employer-sponsored insurance plans, states may choose to provide ABP coverage on a fee-for-service basis. The law authorizes states to pay for the costs of insurance premiums for Medicaid beneficiaries for a health plan offered in the individual insurance market. SSA Section 1937 specifically provides that states may furnish ABP coverage using this private insurance mechanism. Where states use a premium assistance approach, a private insurer serves as payer. The state Medicaid agency pays Medicaid beneficiaries' premiums to enable them to enroll with the private insurer. The state is required to furnish any additional benefits otherwise required under the ABP and not provided by the insurer, and the state must give enrollees information on how to access these additional benefits. CMS has taken the position that the limitations on premiums and cost sharing that apply under traditional Medicaid also apply under ABPs. Therefore, where a benefit package that a state has selected as its ABP benchmark includes premiums and cost sharing that exceed the Medicaid limits, the state must nonetheless adhere to the Medicaid limits in furnishing Medicaid through ABPs. Where a state uses a premium assistance model to provide a Medicaid ABP, the state must ensure that the beneficiary does not incur cost-sharing liability in excess of the Medicaid limits, even if other enrollees in the same commercial health insurance product incur higher cost sharing. Notably, states are barred from applying cost sharing to certain preventive services furnished under ABPs, because cost sharing may not be applied to certain preventive services described under Section 2713 of the Public Health Service Act (42 U.S.C. SS300gg-13) and its implementing regulations furnished through private health insurance plans. CMS does not publish a complete list of the states that have implemented ABPs. Congressional Research Service (CRS) analysis of Medicaid state plan information available on the CMS website indicates that 35 states (including the District of Columbia) and three territories had CMS-approved ABP state plan amendments as of August 6, 2018. Although states have most commonly used ABPs to furnish Medicaid to ACA Medicaid expansion enrollees (as required by law), some states have extended ABP coverage to other populations, as well. For example, ACA Medicaid expansion states (e.g., Indiana, Kentucky, Pennsylvania, Virginia, and West Virginia) had chosen to use ABPs for populations other than the ACA Medicaid expansion population. Further, three non-ACA Medicaid expansion states (Idaho, Kansas, and Wisconsin) had chosen to implement ABPs for various non-expansion Medicaid FBE populations. Finally, three territories--Puerto Rico, the Virgin Islands, and Guam--had implemented the ACA Medicaid expansion and had implemented an ABP state plan amendment. States have most commonly used ABPs to furnish Medicaid to ACA Medicaid expansion enrollees. Selection of the ABP benchmark is a key decision for states implementing the expansion. Overwhelmingly, ACA Medicaid expansion states have implemented an ABP composed of "Secretary-approved coverage" based on the traditional state plan benefit as described below. Based on CRS analysis of Medicaid state plan information available on the CMS website as of August 6, 2018, of the 32 expansion states (including the District of Columbia) that had in effect a state plan amendment escribing the ABP benefit furnished to their expansion population, all had elected benchmark rather than benchmark-equivalent coverage, and 31 (all except North Dakota) elected to use Secretary-approved coverage as the ABP benchmark. Of the 31 expansion states that had elected Secretary-approved coverage, 25 had chosen to align the ABP benefits with traditional Medicaid benefits under the state plan as of August 6, 2018. This policy decision has the potential to minimize the disruptive effect of so-called churn between the ACA Medicaid expansion enrollee eligibility category and other Medicaid eligibility categories. Some of the states that aligned the ABP benefit with traditional state plan benefits did add or remove some benefits for purposes of the ABP. As two examples, Colorado included in its ABP benefit preventive and habilitative services not covered under traditional Medicaid. West Virginia included physical and occupational therapy and home health services under its ABP that were not covered under traditional Medicaid. By contrast, as of August 6, 2018, the remaining six expansion states (Arkansas, Indiana, Iowa, New Hampshire, New Mexico, and Pennsylvania) had selected a private health benefits package or some combination of benefits available under the state plan and within a private health benefits package as their selected form of Secretary-approved coverage. This choice has the potential to minimize disruption when individuals churn between the ACA Medicaid expansion enrollee category and coverage in the individual and small-group market. Notably, three of those six states--Arkansas, Iowa, and New Hampshire--at least initially had chosen to implement their Medicaid expansions through a premium-assistance model. The uptake of the ABP option to furnish services to populations other than ACA Medicaid expansion enrollees has been limited. As of August 6, 2018, per CRS analysis, three states that had not elected to implement the ACA Medicaid expansion (Idaho, Kansas, and Wisconsin) had in effect ABP state plan amendments. Examples of ABPs in two non-expansion states, Kansas and Idaho, are provided below. Kansas has used ABPs to help working individuals with disabilities. Under Kansas's Working Healthy program, non-elderly adults who meet the Social Security definition of disability and are earning income are eligible to receive a full package of Medicaid benefits and are allowed to pay a small monthly premium in lieu of the spenddown obligation that they otherwise would have to meet to be covered as medically needy individuals. Kansas selected an ABP benchmark based on state plan benefits, as well as additional services, including personal assistance services, assistive technology, and independent living counseling, intended to enable the individuals to attain independence. Idaho offers three different ABPs. For each, Idaho elected the Secretary-approved option and modeled the coverage on its EHB base-benchmark plan (a small-group plan), adding certain other benefits. The Basic ABP is available to children and adults who do not have special health needs. The benefit package includes the benefits under the base-benchmark plan, as well as additional prevention and wellness and SUD benefits. The Enhanced ABP is designed for individuals with disabilities and includes, in addition to the benefits included in the base-benchmark plan, additional services such as SUD services, private duty nursing, hospice, and home- and community-based waiver services. Finally, the Medicare/Medicaid Coordinated Alternative Benefit Plan is designed for dual-eligible beneficiaries (who are eligible for both Medicare and Medicaid) and includes, in addition to the benefits under the base-benchmark plan, additional SUD, community-based rehabilitation, and home health services, among others. It is difficult to draw generalizations about the ways in which ABP benefits differ from traditional Medicaid, because the scope of each type of benefit package differs from state to state. Under traditional Medicaid, states may choose which optional benefits to cover, in addition to the mandatory Medicaid state plan services. Under ABPs, states choose the ABP benchmark on which to base the benefit package. States also choose the base-benchmark for the EHBs that must be contained within the ABP. However, differences in the federal law between the scope of required services under traditional benefits and required benefits under ABPs highlight common differences between the two types of benefits. For example, care in a nursing facility for individuals over the age of 21 is a required service under traditional Medicaid, whereas nursing home care is not a required benefit under ABPs. Conversely, rehabilitative and habilitative services and devices, preventive and wellness services, and mental health and substance use disorder services are all required under ABPs. By contrast, under traditional Medicaid, the categories of medical assistance do not correspond precisely to these service categories. Items and services in these categories could fall within different categories of medical assistance, including some required and some optional, and therefore coverage of these categories under traditional Medicaid varies widely from state to state. Behavioral health benefits are mandatory under ABPs, and most types of behavioral health benefits are optional under traditional Medicaid. Each ABP benefit package must include at least the EHBs. The EHBs include "mental health and substance use disorder services, including behavioral health treatment." The required categories of medical assistance under Section 1905 of the SSA, by contrast, do not explicitly include behavioral health or any similar term. Many of the most prevalent types of behavioral health services and items, such as the services of clinical psychologists and licensed clinical social workers and prescription drugs, are optional to states under traditional Medicaid; therefore, coverage of these categories under traditional Medicaid varies widely from state to state. In addition, in furnishing any ABP coverage, whether through managed care or on a fee-for-service basis, states must ensure that any financial requirements and treatment limitations that apply to the benefit package comply with parity requirements in Section 2726 of the Public Health Service Act. This means, for example, that financial requirements (such as cost sharing) or treatment limitations (such as limits on the number of allowed visits) placed on Medicaid ABP behavioral health benefits may not be any more restrictive than for medical and surgical benefits for a given classification of services. By contrast, for traditional Medicaid benefits, the parity requirements affect only services delivered through managed care, not for services delivered in the fee-for-service setting.

Medicaid is a federal-state program that finances the delivery of primary and acute medical services, as well as long-term services and supports, to a diverse low-income population, including children, pregnant women, adults, individuals with disabilities, and people aged 65 and older. Medicaid is financed jointly by the federal government and the states. Federal Medicaid spending is an entitlement, with total expenditures dependent on state policy decisions and use of services by enrollees. State participation in Medicaid is voluntary, although all states, the District of Columbia, and the territories choose to participate. States are responsible for administering their Medicaid programs. States must follow broad federal rules to receive federal matching funds, but they have flexibility to design their own versions of Medicaid within the federal statute's basic framework. This flexibility results in variability across state Medicaid programs. Most Medicaid beneficiaries receive services in the form of what is sometimes called traditional Medicaid. However, states also may furnish Medicaid in the form of alternative benefit plans (ABPs). ABPs were first introduced in the Deficit Reduction Act of 2005 (DRA 2005; P.L. 109-171 P.L. 109-171) and are referred to in the Social Security Act (SSA) as benchmark or benchmark-equivalent coverage. In general, under traditional Medicaid benefit coverage, state Medicaid programs must cover specific required services listed in statute (e.g., inpatient and outpatient hospital services, physician's services, or laboratory and x-ray services) and may elect to cover certain optional services (e.g., prescription drugs, case management, or physical therapy services). Under ABPs, by contrast, states may furnish a benefit that is defined by reference to an overall coverage benchmark that is based on one of three commercial insurance products (e.g., the commercial health maintenance organization (HMO) with the largest insured commercial, non-Medicaid enrollment in the state) or a fourth, "Secretary-approved" coverage option rather than a list of discrete items and services. The 33 states and District of Columbia that have implemented the state option to expand Medicaid to low-income adults under the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) are required to cover the ACA Medicaid expansion population using ABPs, and states also may elect to require other Medicaid populations to receive care through ABPs. States cannot require certain vulnerable populations to obtain benefits through ABPs. ABPs must qualify as either benchmark, where the benefits are at least equal to one the statutorily specified benchmark plans, or benchmark-equivalent benefits, which means the benefits include certain specified services and the overall benefits are at least actuarially equivalent to one of the statutorily specified benchmark coverage packages. In addition, ABPs must include a variety of specific services, including services under Medicaid's early and periodic screening, diagnostic, and testing (EPSDT) benefit and family planning services and supplies. Unlike traditional Medicaid benefit coverage, coverage under an ABP must include at least the essential health benefits (EHB) that most plans in the private health insurance market are required to furnish. States choose whether to furnish ABPs through managed care or a fee-for-service delivery system. The Medicaid limitations on beneficiary premiums and cost sharing apply to services furnished through ABPs. To date, states have chiefly used ABPs as the benefit package for the ACA Medicaid expansion population. However, several states have elected to use ABPs to serve other Medicaid populations (e.g., working individuals with disabilities or children and adults who do not have special health care needs). States can have more than one ABP coverage option to serve different target populations operating concurrently with traditional Medicaid benefit coverage. States have largely used the ABP design flexibility to align their benefit coverage with the traditional Medicaid benefit coverage.

On January 29, 2008, President George W. Bush signed Executive Order 13,457, "Protecting American Taxpayers from Government Spending on Wasteful Earmarks." The order states that it is the policy of the federal government "to be judicious in the expenditure of taxpayer dollars." In order "[t]o ensure the proper use of taxpayer funds," the order provides that the number and cost of earmarks should be reduced, that their origin and purposes should be transparent, and that they should be included in the text of bills voted upon by Congress and presented to the President. For appropriations laws and other legislation enacted after the date of the order, it directs executive agencies not to commit, obligate, or expend funds on the basis of earmarks included in any non-statutory source, including requests in reports of committees of Congress or other congressional documents or communications on behalf of Members of Congress, or any other non-statutory source, except when required by law or when an agency itself has determined that a project, program, grant, or other transaction has merit under statutory criteria or other merit-based decision-making. Under the executive order, an "agency" is an executive agency defined in section 105 of title 5 of the United States Code and includes the United States Postal Service and the Postal Regulatory Commission, but excludes the Government Accountability Office. This section states that an "executive agency" means a "department, a government corporation, and an independent establishment." An "independent establishment" is defined in section 104 of title 5. An "earmark" in the executive order means funds provided by Congress for projects, programs, or grants where the purported congressional direction (whether in statutory text, report language, or other communication) circumvents otherwise applicable merit-based or competitive allocation processes, or specifies the location or recipient, or otherwise curtails the ability of the executive branch to manage its statutory and constitutional responsibilities pertaining to the funds allocation process. The executive order identifies four duties of agency heads relating to earmarks. With respect to all appropriations laws and other legislation enacted after the date of the order, it directs the each agency head to take all necessary steps to ensure, first, that (1) agency decisions to commit, obligate, or expend funds for any earmark are based on the text of laws, and are not based on language in any congressional committee report, joint explanatory statement of a committee of conference, statement of managers concerning a bill in Congress, or any other non-statutory statement or indication of views of Congress or a House of Congress, committee, Member, officer, or staff thereof; (2) agency decisions to commit, obligate, or expend funds for any earmark are based on authorized, transparent, statutory criteria and merit-based decisionmaking, in the manner set forth in section II of Office of Management and Budget (OMB)Memorandum M-07-10, dated February 15, 2007, to the extent consistent with applicable law; and (3) no oral or written communications concerning earmarks shall supersede statutory criteria, competitive awards, or merit-based decisionmaking. Second, the executive order provides that an agency shall not consider the views of a House of Congress, committee, Member, officer, or staff of Congress with respect to commitments, obligations, or expenditures to carry out any earmark unless such views are in writing, to facilitate consideration in accordance with the requirement to base spending decisions on authorized, transparent statutory criteria and merit-based decision making to the extent consistent with applicable law. All written communications from Congress, a House of Congress, committee, Member, officer, or staff thereof, recommending that funds be committed, obligated, or expended on any earmark shall be made publicly available on the Internet by the receiving agency, not later than 30 days after such communication is received, unless otherwise specifically directed by the agency head, without delegation, after consulting with the OMB Director, to preserve appropriate confidentiality between the executive and legislative branches. Third, it requires that agency heads otherwise shall implement within their respective agencies the policy set forth in SS 1 of the executive order consistent with any instructions that the Director of OMB may prescribe. The fourth duty is to provide to the OMB Director any information about earmarks and compliance with the executive order that the Director requests. Executive Order 13,457 has some general provisions which state that nothing in it shall be construed to impair or otherwise affect: (a) authority granted by law to an agency or agency head; or (b) functions of the OMB Director relating to budget, administrative, or legislative proposals. Moreover, it provides that the order shall be implemented in a manner consistent with applicable law and subject to the availability of appropriations. Finally, the order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity, by any party against the United States, its agencies, instrumentalities, its officers, employees, or agents, or any other person. In his State of the Union address on January 28, 2008, the President explained the reason for issuing the executive order: The people's trust in their government is undermined by congressional earmarks--special interest projects that are often stuck in at the last minute, without discussion or debate. Last year I asked you to voluntarily cut the number of earmarks and the cost of earmarks in half. I also asked you to stop slipping earmarks into committee reports that never come to a vote. Unfortunately, neither goal was met. So this time, if you send me an appropriations bill that does not cut the number or cost of earmarks in half, I'll send it back to you with my veto. And tomorrow, I will issue an executive order that directs federal agencies to ignore any future earmark that is not voted on by Congress. If these items are truly worth funding, Congress should debate them in the open and hold a public vote. There is a long tradition of congressional inclusion of, and agency compliance with, spending directives that are delineated in committee report language or in joint explanatory statements issued by conference committees. If applied rigorously, the provisions of Executive Order 13,457 could significantly alter this traditional dynamic, raising questions regarding the President's authority to control executive branch activity in this context via executive order. The President's ability to issue and implement executive orders may stem from both constitutional and statutory authority. In the constitutional context, presidential power to issue such orders has been derived from Article II, which states that "the executive power shall be vested in a President of the United States," that "the President shall be Commander in Chief of the Army and Navy of the United States," and that the President "shall take care that the laws be faithfully executed." The President's power to issue executive orders and proclamations may also derive from express or implied statutory authority. Irrespective of the nature of the authority to issue executive orders and proclamations, these instruments have been employed by every President since the inception of the Republic, and Presidents have not hesitated to wield this power over a wide range of often controversial subjects. Furthermore, if issued under a valid claim of authority and published, these instruments may have the force and effect of law, requiring courts to take judicial notice of their existence. While these principles establish the authority of the President to issue executive orders generally, the question of whether a particular order comports with constitutional and statutory provisions requires a more nuanced analysis. The framework for analyzing the validity of an executive order was delineated in Youngstown Sheet & Tube Co. v. Sawyer . There, the Supreme Court dealt with President Truman's executive order directing the seizure of steel mills, which was issued in an effort to avert the effects of a workers' strike during the Korean War. Invalidating this action, the majority held that under the Constitution, "the President's power to see that laws are faithfully executed refutes the idea that he is to be a lawmaker." Specifically, Justice Black maintained that Presidential authority to issue such an executive order "must stem either from an act of Congress or from the Constitution itself." Applying this reasoning, Justice Black's opinion for the Court determined that as no statute or Constitutional provision authorized such presidential action, the seizure order was in essence a legislative act. The Court further noted that Congress had rejected seizure as a means to settle labor disputes during consideration of the Taft-Hartley Act. Given this characterization, the Court deemed the executive order to be an unconstitutional violation of the separation of powers doctrine, explaining "the founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times." While Justice Black's majority opinion in Youngstown seems to refute the notion that the President possesses implied constitutional powers, there were five concurrences in the case, four of which maintained that implied presidential authority adheres in certain contexts. Of these concurrences, Justice Jackson's has proven to be the most influential, even surpassing the impact of Justice Black's majority opinion. Specifically, Justice Jackson established a tri-partite scheme for analyzing the validity of presidential actions in relation to constitutional and congressional authority. Justice Jackson's first category focuses on whether the President has acted according to an express or implied grant of congressional authority. If so, according to Jackson, presidential "authority is at its maximum, for it includes all that he possesses in his own right plus all that Congress can delegate," and such action is "supported by the strongest of presumptions and the widest latitude of judicial interpretation." Secondly, Justice Jackson maintained that, in situations where Congress has neither granted nor denied authority to the President, the President acts in reliance only "upon his own independent powers, but there is a zone of twilight in which he and Congress may have concurrent authority, or in which its distribution is uncertain." In the third and final category, Justice Jackson stated that in instances where presidential action is "incompatible with the express or implied will of Congress," the power of the President is at its minimum, and any such action may be supported pursuant only the President's "own constitutional powers minus any constitutional powers of Congress over the matter." In such a circumstance, presidential action must rest upon an exclusive power, and the Courts can uphold the measure "only by disabling the Congress from acting upon the subject." With regard to President Truman's order, Justice Jackson determined that analysis under the first category was inappropriate, due to the fact that seizure of steel mills had not been authorized by Congress, either implicitly or explicitly. Justice Jackson also determined that the second category was "clearly eliminated," in that Congress had addressed the issue of seizure, through statutory policies conflicting with the President's actions. Employing the third category, Justice Jackson noted that President Truman's actions could only be sustained by determining that the seizure was "within his domain and beyond control by Congress." Justice Jackson concluded that such matters were not outside the scope of congressional power, reinforcing his declaration that permitting the President to exercise such "conclusive and preclusive" power would endanger "the equilibrium established by our constitutional system." Applying these principles to the case at hand, there does not appear to be any discernible basis upon which it could be asserted that Executive Order 13,457 runs contrary to constitutional or statutory precepts. While the potential centralization of control over agency treatment of non-statutory earmarks raises significant policy issues, E.O. 13,457 appears to fall within the accepted parameters of presidential authority in the executive order context, particularly when viewed in relation to other executive orders that have asserted similar and arguably more expansive centralization authority. For instance, in 1981, President Reagan issued Executive Order 12,291, ushering in a new era of presidential control over agency rulemaking activity. E.O. 12,291 required cost-benefit analyses and established a centralized review procedure for all agency regulations. E.O. 12,291 delegated responsibility for this clearance requirement to the Office of Information and Regulatory Affairs, which had recently been created within the Office of Management and Budget as part of the Paperwork Reduction Act of 1980. The impact of E.O. 12,291 on agency regulatory activities was immediate and substantial, generating controversy and criticism. Opponents of the order asserted that review thereunder was distinctly anti-regulatory and constituted an unconstitutional transfer of authority from the executive agencies. Despite these concerns, courts considering OMB involvement in agency rulemaking under the executive order did not address the constitutionality of such review, and Congress did not act to countermand the executive order. The review scheme established in the Reagan Administration has been employed and modified by subsequent Administrations in a manner that conveys a conception of presidential authority consonant with that of the Reagan order. However, arguments against the constitutionality of these executive orders have largely diminished, to the point that presidential review of agency rulemaking has become a widely used and increasingly accepted mechanism by which a President can exert significant and sometimes determinative authority over the agency rulemaking process. The implicit acquiescence of Congress and the courts regarding the constitutionality of 12,291 and its successors indicates that a President may successfully utilize executive orders to exert significant, centralized control over executive branch activity that has traditionally been exercised at the departmental or agency level. This rationale seems fully applicable to Executive Order 13,457, particularly in light of the fact that non-statutory earmarks are not legally binding on executive branch agencies. Art. I, sec. 9, cl. 7 of the Constitution states that, "No money shall be drawn from the treasury, but in consequence of appropriations made by law." With respect to all appropriations laws and other legislation enacted after the date of the order, the executive order directs each agency head to take all necessary steps to ensure that agency spending decisions are based on the text of laws and not on language in legislative history documents or other congressional communications to agencies and otherwise to implement the policy that earmarks should be included in the text of bills voted upon by Congress and presented to the President. The Supreme Court in Lincoln v. Vigil unanimously acknowledged a premise upon which the executive order appears to be based: Language in legislative history documents does not legally bind agencies unless it is enacted in the text of a statute. [A] fundamental principle of appropriations law is that where "Congress merely appropriates lump sum amounts without statutorily restricting what can be done with those funds, a clear inference arises that it does not intend to impose legally binding restrictions, and indicia in committee reports and other legislative history as to how funds should or are expected to be spent do not establish any legal requirements on" the agency. LTV Aerospace Corp. , 55 Comp. Gen. 307, 309 (1975); cf. , American Hospital Assn. v. NLRB , 499 U.S. 606, 616 (1991) (statements in committee reports do not have the force of law); TVA v. Hill, 437 U.S. 153, 191 (1978) ("Expressions of committees dealing with requests for appropriations cannot be equated with statutes enacted by Congress.") Put another way, a lump sum appropriation reflects a congressional recognition that an agency must be allowed "flexibility to shift ... funds within a particular ... appropriation account so that" the agency "can make necessary adjustments for 'unforeseen developments' and 'changing requirements.'" LTV Aerospace Corp., supra , at 318 (citation omitted.)" ... Of course, an agency is not free simply to disregard statutory responsibilities: Congress may always circumscribe agency discretion to allocate resources by putting restrictions in the operative statutes (though not, as we have seen, just in the legislative history). A year later in Shannon v, United States , the Court emphasized this point when it observed that, "We are not aware of any case ... in which we have given authoritative weight to a single passage of legislative history that is in no way anchored in the text of a statute.... We agree with the D.C. Circuit that "Courts have no authority to enforce [a] principl[e] gleaned solely from legislative history that has no statutory reference point." The Court in the Lincoln case quoted from LTV Aerospace Corp ., a decision of the Comptroller General, who heads the Government Accountability Office (GAO), formerly the General Accounting Office. In that decision, the Comptroller General said that with respect to appropriations, there is a clear distinction to be made between the imposition of statutory restrictions or conditions which are intended to be legally binding and the technique of specifying restrictions or conditions in a nonstatutory context. In this regard, Congress has recognized that in most instances it is desirable to maintain executive flexibility to shift around funds within a particular lump sum so that agencies can make necessary adjustments.... This is not to say that Congress does not expect that funds will be spent in accordance with budget estimates or in accordance with restrictions detailed in committee reports. However, in order to preserve spending flexibility, it may choose not to impose those particular restrictions as a matter of law, but rather to leave it to the agencies to "keep faith" with the Congress.... There are practical reasons why agencies can be expected to comply with these congressional expectations.... On the other hand, when Congress does not intend to permit agency flexibility, but intends to impose a legally binding restriction on an agency's use of funds, it does so by means of explicit statutory language. The Comptroller General added that as a general proposition, there is a distinction to be made between utilizing legislative history for the purpose of illuminating underlying language and resorting to that history for the purpose of writing into law that which is not there.... An accommodation has developed between the Congress and the executive branch resulting in the appropriation process flexibility discussed above. Funds are most often appropriated in lump sums on the basis of mutual legislative and executive understandings as to their use and derive from agency budget estimates and testimony and expressions of intent in committee reports. The understandings reached generally are not engrafted upon the appropriation provisions enacted. To establish as a matter of law specific restrictions covering the detailed and complete basis upon which appropriated funds are understood to be provided would, as a practical matter, severely limit the capability of agencies to accommodate changing conditions. Both the Supreme Court and the Comptroller General have indicated the consequence for an agency if it disregards directives in legislative history documents. The Court in the Lincoln case said that, "And, of course, we hardly need to note that an agency's decision to ignore congressional expectations may expose it to grave political consequences." Referring to a passage which indicated that Congress sometimes places restrictions in legislative history documents rather than in statutory text to permit agencies to accommodate changing conditions when allocating funds, the Comptroller General stated that, "This does not mean agencies are free to ignore clearly expressed legislative history applicable to the use of appropriated funds. They ignore such expressions of intent at the peril of strained relations with the Congress. The executive branch ... has a practical duty to abide by such expressions. This duty, however, must be understood to fall short of a statutory requirement giving rise to a legal infraction where there is a failure to carry out that duty." The above sections have reviewed the elements of Executive Order 13,457, the legal basis for the President to issue executive orders and their legal effect, and the consistency between the substance of the order and case law which acknowledges that earmarks in legislative history documents but not in statutory text do not legally bind agencies to fund them. A primary purpose of the executive order appears to be to limit the discretion of individual executive agency heads to fund earmarks that appear only in legislative history documents and other nonstatutory sources; it expresses a uniform policy throughout the executive branch that they generally should not be funded and that agency heads should base funding decisions on "authorized, transparent, statutory criteria and merit-based decision-making." Congress has a number of options to respond to this executive order. It can choose to operate within the new legal milieu that it appears to formalize or take steps to countermand it. One option to operate within it, of course, would be for Congress expressly to include each earmark in the text of a statute and thereby place it beyond the agency decision-making process that the executive order requires for nonstatutory ones. To become law, each earmark in a bill would have to pass the House and Senate and be presented to the President and, if the bill were vetoed, pass by two-thirds of each House to override a presidential veto. Another form of express incorporation would be for Congress to include language in a statute to the effect that, "Earmarks in a joint explanatory statement in House Report No. 110-XXX shall be effective as if enacted into law." Another option would be for Congress to incorporate by reference in the text of a statute each earmark that appears in legislative history documents in such a way that Members and Senators voting on the incorporating textual language and the President to whom the language is presented would be made aware of the earmarks involved. An example is a provision of the Revised Continuing Appropriations Resolution, 2007, which provides that, "The Office of National Drug Control Policy shall expend funds for 'Counterdrug Technology Center' by Public Law 109-115 in accordance with the joint explanatory statement of the committee of conference (H.Rept. No. 109-307) within 60 days after the date of enactment of this section." The unambiguous language of a directive of this type--"shall expend"--would appear legally to bind an agency to expend funds in accordance with the joint explanatory statement to which the directive refers. In Chevron, U.S.A. v. Natural Resources Defense Council, Inc. , the Supreme Court held that [w]hen a court reviews an agency's construction of a statute, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter, for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. A passage in the policy section of the earmarks executive order may acknowledge this principle. It states, in relevant part, that "[f]or appropriations laws and other legislation enacted after the date of this order, executive agencies should not commit, obligate, or expend funds on the basis of earmarks included in any non-statutory source, including reports of committees of the Congress or other congressional documents ... except when required by law." If Congress should choose to attempt to countermand the executive order, it could seek to enact language stating that it should have no force and effect. Another congressional option would be to seek to deny funds to the Office of Management and Budget to enforce the order. As noted above, SS 4(b) of the order states that it "... shall be implemented in a manner consistent with applicable law and subject to the availability of appropriations." There is precedent for Congress enacting a statute to revoke an executive order. During the Administration of President William J. Clinton, Congress enacted a provision of the National Institutes of Health Revitalization Act of 1993, which stated that the provisions of Executive Order 12,806, "... shall not have any legal effect." This executive order, which had been issued by President George H.W. Bush the previous year, directed the Secretary of Health and Human Services to establish a fetal tissue bank. Given the highly speculative basis of any asserted constitutional authority for the President to issue such an order, there appears to be little doubt as to the legitimacy of this congressional revocation. However, any congressional attempt to revoke the earmarks executive order could set the stage for a more significant confrontation, given the broad conception of presidential authority upon which its issuance appears to be premised. Ultimately, whether enacting a statute to revoke the order or enacting language denying OMB funds to enforce it would have significant legal effect is not clear because of the nature of the order. As noted in the discussion above on consistency between it and relevant case law, Executive Order 13,457 does not appear to create new law. Instead, it directs executive agencies to comply with a principle acknowledged by the Supreme Court: namely, that agencies are not legally required to fund earmarks contained in legislative documents but not in the text of statutes. Its significance appears to be in the establishment of a uniform policy throughout the executive branch and the imposition of specific duties on agency heads to foster its implementation. The provisions of Executive Order 13,457 may significantly influence the dynamic that has traditionally governed executive and legislative practice with regard to nonstatutory earmarks, but the order itself appears to fall within the accepted parameters of presidential authority in the executive order context. Courts have acknowledged a premise upon which the order appears to be based: Earmarks in legislative history documents and other sources that are not anchored in statutory text have no legal force or effect. Moreover, while the provisions of the order appear to direct executive agencies to refrain from funding nonstatutory earmarks that they may have funded as a matter of course before it was issued, Congress has options such as expressly including earmarks in the texts of statutes or statutorily incorporating by reference earmarks in legislative history documents. These congressional responses may ameliorate the impact of the order. Ultimately, the extent to which the earmarks executive order will affect agency practice pertaining to non-statutory earmarks remains to be seen, and, as the foregoing analysis indicates, may prove to be more a matter of political rather than legal significance.

On January 29, 2008, President George W. Bush signed Executive Order 13,457, "Protecting American Taxpayers from Government Spending on Wasteful Earmarks." The order states that it is the policy of the federal government "to be judicious in the expenditure of taxpayer dollars." In order "[t]o ensure the proper use of taxpayer funds," the order provides that the number and cost of earmarks should be reduced, that their origin and purposes should be transparent; and that they should be included in the text of bills voted upon by Congress and presented to the President. For appropriations laws and other legislation enacted after the date of the order, it directs executive agencies not to commit, obligate, or expend funds on the basis of earmarks included in any non-statutory source, including requests in reports of committees of Congress or other congressional documents or communications on behalf of Members of Congress, or any other non-statutory source, except when required by law or when an agency itself has determined that a project, program, grant, or other transaction has merit under statutory criteria or other merit-based decision-making. In the context of the order, an "earmark" is defined as any funds provided by Congress for projects, programs, or grants where the purported congressional direction (whether in statutory text, report language, or other communication) circumvents otherwise applicable merit-based or competitive allocation processes, or specifies the location or recipient, or otherwise curtails the ability of the executive branch to manage its statutory and constitutional responsibilities pertaining to the funds allocation process. There is a long tradition of congressional inclusion of, and agency compliance with, spending directives that are delineated in committee report language or in joint explanatory statements issued by conference committees. If applied rigorously, the provisions of Executive Order 13,457 could significantly alter this traditional dynamic. Accordingly, this report provides an overview of the provisions of the order; addresses questions that have arisen regarding both the President's authority to control executive branch activity in this context and the effect of non-statutory congressional spending directives; and considers and evaluates potential congressional responses to the executive order. The report will be updated as events warrant.

In 1999, a federal district court judge approved a settlement agreement and consent decree in Pigford v. Glickman , a class action discrimination suit between the U.S. Department of Agriculture (USDA) and black farmers. Due to concerns about the large number of applicants who did not obtain a determination on the merits of their claims under the original Pigford settlement, Congress enacted legislation in 2008 that permitted any claimant who had submitted a late-filing request under Pigford and who had not previously obtained a determination on the merits of his or her claim to petition in federal court to obtain such a determination. The multiple claims that were subsequently filed were consolidated into a single case, In re Black Farmers Discrimination Litigation (commonly referred to as Pigford II ), and an agreement was reached to settle these claims. This report discusses both the original Pigford consent decree and the subsequent Pigford II settlement. Before turning to the main discussion regarding the litigation in these cases, it is useful to understand the historical background leading up to the litigation, as well as some of the studies that have examined USDA's treatment of minority farmers during this period. Litigation against the U.S. Department of Agriculture (USDA) for discrimination against African American farmers began in August 1997 with two suits brought by black farmers-- Pigford v. Glickman and Brewington v. Glickman --but its origins go back much further. For many years, black farmers had complained that they were not receiving fair treatment when they applied to local county committees (which make the decisions) for farm loans or assistance. These farmers alleged that they were being denied USDA farm loans or forced to wait longer for loan approval than were non-minority farmers. Many black farmers contended that they were facing foreclosure and financial ruin because the USDA denied them timely loans and debt restructuring. Moreover, many claimed that the USDA was not responsive to discrimination complaints. A huge agency backlog of unresolved complaints began to build after the USDA's Civil Rights Office was closed in 1983. In 1994, the USDA commissioned D. J. Miller & Associates, a consulting firm, to analyze the treatment of minorities and women in Farm Service Agency (FSA) programs and payments. The study examined conditions from 1990 to 1995 and looked primarily at crop payments and disaster payment programs and Commodity Credit Corporation (CCC) loans. The final report found that from 1990 to 1995, minority participation in FSA programs was very low and minorities received less than their fair share of USDA money for crop payments, disaster payments, and loans. According to the commissioned study, few appeals were made by minority complainants because of the slowness of the process, the lack of confidence in the decision makers, the lack of knowledge about the rules, and the significant bureaucracy involved in the process. Other findings showed that (1) the largest USDA loans (top 1%) went to corporations (65%) and white male farmers (25%); (2) loans to black males averaged $4,000 (or 25%) less than those given to white males; and (3) 97% of disaster payments went to white farmers, while less than 1% went to black farmers. The study reported that the reasons for discrepancies in treatment between black and white farmers could not be easily determined due to "gross deficiencies" in USDA data collection and handling. In December 1996, Secretary of Agriculture Dan Glickman ordered a suspension of government farm foreclosures across the country pending the outcome of an investigation into racial discrimination in the agency's loan program and later announced the appointment of a USDA Civil Rights Task Force. On February 28, 1997, the Civil Rights Task Force recommended 92 changes to address racial bias at the USDA, as part of a USDA Civil Rights Action Plan. While the action plan acknowledged past problems and offered solutions for future improvements, it did not satisfy those seeking redress of past wrongs and compensation for losses suffered. In August 1997, a proposed class action suit was filed by Timothy Pigford (and later by Cecil Brewington) in the U.S. District Court for the District of Columbia on behalf of black farmers against the USDA. The suit alleged that the USDA had discriminated against black farmers from 1983 to 1997 when they applied for federal financial help and again by failing to investigate allegations of discrimination. This section discusses the Pigford lawsuit and the subsequent settlement approved by the court in the consent decree, as well as current statistics regarding the resolution of Pigford claims. Following the August 1997 filing for class action status, the attorneys for the black farmers requested blanket mediation to cover all of the then-estimated 2,000 farmers who may have suffered from discrimination by the USDA. In mid-November 1997, the government agreed to mediation and to explore a settlement in Pigford . The following month, the parties agreed to stay the case for six months while mediation was pursued and settlement discussions took place. Although the USDA had acknowledged past discrimination, the Justice Department opposed blanket mediation, arguing that each case had to be investigated separately. When it became apparent that the USDA would not be able to resolve the significant backlog of individual complaints from minority farmers, and that the government would not yield on its objections to class relief, plaintiffs' counsel requested that the stay be lifted and a trial date be set. On March 16, 1998, the court lifted the stay and set a trial date of February 1, 1999. On October 9, 1998, the court issued a ruling certifying as a class black farmers who filed discrimination complaints against the USDA between January 1983 and February 21, 1997. In his ruling, Judge Friedman concluded that the class action vehicle was "the most appropriate mechanism for resolving the issue of liability" in the case. A complicating factor throughout the period, however, was a two-year statute of limitations in the Equal Credit Opportunity Act (ECOA), the basis for the suit. Congress, accordingly, passed a measure in the FY1999 omnibus funding law that waived the statute of limitations on civil rights cases for complaints made against the USDA between 1981 and December 31, 1996. As the court date approached, the parties reached a settlement agreement and filed motions consolidating the Pigford and Brewington cases, redefining the certified class and requesting preliminary approval of a proposed consent decree. On April 14, 1999, the court approved the consent decree, setting forth a revised settlement agreement of all claims raised by the class members. Review of the claims began almost immediately, and the initial disbursement of checks to qualifying farmers began on November 9, 1999. Under the consent decree, an eligible recipient is an African American who (1) farmed or attempted to farm between January 1, 1981, and December 31, 1996, (2) applied to USDA for farm credit or program benefits and believes that he or she was discriminated against by the USDA on the basis of race, and (3) made a complaint against the USDA on or before July 1, 1997. The consent decree set up a system for notice, claims submission, consideration, and review that involved a facilitator, arbitrator, adjudicator, and monitor, all with assigned responsibilities. The funds to pay the costs of the settlement (including legal fees) come from the Judgment Fund operated by the Department of the Treasury, not from USDA accounts or appropriations. The Pigford consent decree basically establishes a two-track dispute resolution mechanism for those seeking relief. The most widely used option-- Track A --provides a monetary settlement of $50,000 plus relief in the form of loan forgiveness and offsets of tax liability. Track A claimants had to present substantial evidence (i.e., a reasonable basis for finding that discrimination happened) that the claimant owned or leased, or attempted to own or lease, farm land; the claimant applied for a specific credit transaction at a USDA county office during the applicable period; the loan was denied, provided late, approved for a lesser amount than requested, encumbered by restrictive conditions, or USDA failed to provide appropriate loan service, and such treatment was less favorable than that accorded specifically identified, similarly situated white farmers; and the USDA's treatment of the loan application led to economic damage to the class member. Alternatively, class participants could seek a larger, tailored payment by showing evidence of greater damages under a Track B claim. Track B claimants had to prove their claims and actual damages by a preponderance of the evidence (i.e., it is more likely than not that their claims are valid). The documentation to support such a claim and the amount of relief were reviewed by a third party arbitrator, who makes a binding decision. The consent decree also provided injunctive relief, primarily in the form of priority consideration for loans and purchases, and technical assistance in filling out forms. Finally, plaintiffs were permitted to withdraw from the class and pursue their individual cases in federal court or through the USDA administrative process. Under the original consent decree, claimants were to file their claim with the facilitator (Poorman-Douglas Corporation) within 180 days of the consent decree, or no later than October 12, 1999. For those determined to be eligible class members, the facilitator forwarded the claim to the adjudicator (JAMS-Endispute, Inc.), if a Track A claim, or to the arbitrator (Michael Lewis, ADR Associates), if a Track B claim. If the facilitator determined that the claimant was not a class member, the claimant could seek review by the monitor (Randi Roth). If the facilitator (and later by court order, the arbitrator ) ruled that the claim was filed after the initial deadline, the adversely affected party could request permission to file a late claim under a process subsequently ordered by the court. Late-filing claimants were directed to request permission to submit a late claim to the arbitrator by no later than September 15, 2000. The arbitrator was to determine if the reason for the late filing reflected extraordinary circumstances (e.g., Hurricane Floyd, a person being homebound, or a failure of the postal system). Since there reportedly had been extensive and widespread notice of the settlement agreement and process--including local meetings and advertisements in radio, television, newspapers, and periodicals across the nation and in heavily populated black minority farmer areas-- lack of notice was ruled an unacceptable reason for late filing. In general, there seems to be a consensus that many of the issues surrounding the implementation of Pigford I can be attributed to the gross underestimation of the number of claims that would actually be filed. At the same time, many in Congress and those closely associated with the settlement agreement have voiced much concern over the large percentage of denials, especially under Track A--the "virtually automatic" cash payment. Interest groups have suggested that the relatively poor approval percentages (69%) can be attributed to the consent decree requirement that claimants show that their treatment was "less favorable than that accorded specifically identified, similarly situated white farmers," which was exacerbated by poor access to USDA files. Table 1 shows the Court Monitor cumulative statistics for Track A claims as of December 30, 2011. As of that date, there were also 169 eligible Track B claimants (1% of the total eligible class members). These data are the final data reported by the Court Monitor. More alarming to many, however, was the large percentage of farmers who did not have their cases heard on the merits because they filed late--those now eligible to file under Pigford II , as described below. Approximately 73,800 Pigford II petitions (66,000 before the September 15, 2000, late filing deadline) were filed under the late filing procedure, of which 2,116 were ultimately allowed to proceed under the Pigford I process. Many claimants who were initially denied relief under the late filing procedures subsequently requested a reconsideration of their petitions. Out of the approximately 20,700 timely requests for reconsideration, 17,279 requests had been decided; 113 had been allowed to proceed by the end of 2005, according to the most recent compilation of individual case data. Many argued that the large number of late filings indicated that the notice was "ineffective or defective." Others countered these claims by arguing that the Pigford notice program was designed, in part, to promote awareness and could not make someone file. Some also suggested--including many of the claimants--that the class counsel was responsible for the inadequate notice and overall mismanagement of the settlement agreement. Judge Friedman, for example, cautioned the farmers' lawyers for their failure to meet deadlines and described their representation, at one point, as "border[ing] on legal malpractice." Judge Friedman also declared that he was "surprised and disappoint[ed]" that USDA did not want to include in the consent decree a sentence that in the future the USDA would exert "best efforts to ensure compliance with all applicable statutes and regulations prohibiting discrimination." The judge's statements apparently did not go unnoticed, as the Black Farmers and Agriculturalists Association (BFAA) filed a $20.5 billion class action lawsuit in September 2004 against the USDA on behalf of roughly 25,000 farmers for alleged racial discriminatory practices against black farmers between January 1997 and August 2004. This lawsuit, however, was dismissed in March 2005 because BFAA failed to show it had standing to bring the suit. The cumulative data for Pigford I were reported December 31, 2011 in the final Court Monitor Report published April 1, 2012. These data include both Track A and Track B claimants, and are summarized below: Approximately 22,721 claimants were found eligible to participate in the claims process. Approximately 22,552 claimants chose to resolve their claims through Track A. Approximately 15,645 (69%) prevailed in the Track A claims process. Approximately 169 claimants chose to resolve their claims through Track B. Approximately 104 (62%) prevailed in the Track B claims process or settled their Track B claims and received a cash payment. Approximately 5,848 claims were the subject of a petition for reexamination of a decision by the Facilitator (eligibility), Adjudicator (Track A), or Arbitrator (Track B). The Monitor directed reexamination of approximately 2,941 (50%) of the claims. The federal government provided a total of approximately $1.06 billion ($1,058,577,198) in cash relief, estimated tax payments, and debt relief to prevailing claimants (Track A and Track B). Due to concerns about the large number of applicants who did not obtain a determination on the merits of their claims under the original Pigford settlement, Congress included a provision in the 2008 farm bill that permitted any claimant who had submitted a late-filing request under Pigford and who had not previously obtained a determination on the merits of his or her claim to petition in federal court to obtain such a determination. This provision did not reopen the previous Pigford litigation, but rather provided such farmers with a new right to sue. Ultimately, multiple separate lawsuits were filed, and these claims were consolidated into a single case, In re Black Farmers Discrimination Litigation (commonly referred to as Pigford II ). On February 18, 2010, Attorney General Holder and Secretary of Agriculture Vilsack announced a $1.25 billion settlement of these Pigford II claims. Normally, funding for the costs of such settlements would be paid out of the Judgment Fund, which is a permanent, indefinite appropriation for the payment of final judgments and "compromise settlements" for which "payment is not otherwise provided." However, because $100 million was made available for payment of Pigford II claims in the 2008 farm bill, meaning that payment was otherwise provided for, the Pigford II settlement was contingent upon congressional approval of an additional $1.15 billion in funding. After a series of failed attempts to appropriate funds for the settlement agreement (see " Legislative Action " section below), the Senate passed the Claims Resolution Act of 2010 ( H.R. 4783 ) to provide the $1.15 billion appropriation by unanimous consent on November 19, 2010. In addition to the funding, the legislation contains several measures that appear to be designed to combat potential fraud during the settlement process. The Senate bill was passed by the House on November 30, 2010, and signed by the President on December 8, 2010. Relevant provisions in the act have been incorporated into the settlement agreement, which was revised as of May 13, 2011. Under the terms of the Pigford II settlement agreement, an eligible claimant is any individual who submitted a late-filing request under Section 5(g) of the original Pigford consent decree after October 12, 1999, and before June 19, 2008, but who has not obtained a determination on the merits of his or her discrimination complaint. Like the original Pigford decision, the Pigford II settlement provides both a "fast-track" adjudication process and a track for higher payments to claimants who go through a more rigorous review and documentation process. Potential claimants could seek the fast-track payments of up to $50,000 plus debt relief, or choose the longer process for damages of up to $250,000. On October 27, 2011, the U.S. District Court for the District of Columbia granted final approval of the settlement agreement. Under the terms of the court order, claims could be submitted beginning on November 14, 2011. Both the settlement agreement and the order and opinion approving the agreement set forth detailed requirements regarding claims submission procedures. The deadline for submitting claims was May 11, 2012. The court overseeing the Pigford II litigation also authorized the law firms representing the plaintiffs to establish a website for information purposes ( http://blackfarmercase.com/ ), through which interested parties could find information about the claims process, request a claims form, and monitor the progress of the review process. According to the third-party information management firm overseeing the claims process, approximately 89,000 claim forms were mailed out. Nearly 40,000 of them ultimately were filed. Of those, approximately 34,000 were deemed complete, timely, and eligible. The claims administrator developed an internal control design to identify and deny any invalid claims. Hearing officers--retired judges and lawyers with no involvement in the case--were approved by the court, sworn in, and trained in the elements of the claims. Each claim went through four to five reviews. Statistical reviews of the behavior of individual hearing officers were also conducted to further ensure that each claim was subjected to a fair and consistent review process. Ongoing monitoring by the Government Accountability Office (GAO) and USDA's Office of the Inspector General added further auditing and data standardization to the claims review process. The Claims Resolution Act of 2010 ( P.L. 111-291 ), which provided the funds for the Pigford II settlement, mandated that GAO evaluate the internal controls for the Pigford II review process and report twice on the review process. In December 2012, GAO published a report on its first evaluation of the review process. GAO concluded that "the internal control design provides reasonable assurance that fraudulent or otherwise invalid claims could be identified and denied; however, certain weaknesses in the control design could expose the claims process to risk of improper determinations." Some of the weaknesses GAO identified were a result of constraints imposed by the settlement agreement itself, and, in some cases, originated in the Pigford I settlement. GAO recognized that these weaknesses could not be modified by the parties implementing Pigford II . GAO also identified weakness in the internal control design that could be modified. GAO noted in its report (1) that the internal controls could be improved to identify and prevent claimants who obtained prior judgments on their discrimination complaints (e.g., claims under Pigford I ); and (2) that the internal control design needed to be fully implemented, including measures that could prevent duplicate claims submitted on behalf of the same farming operation or the same class member. Under the settlement, no claims will be paid until the merits of all claims have been determined. A determination of the validity of the claims is expected to be completed in June /July 2013, after which the claims administrator will begin distributing payments to successful claimants. A final judicial review of the claims review process will occur before final settlement. Preliminary estimates from the Claims Administrator suggest that 17,000-19,000 Track A claims are likely to be positively adjudicated under Pigford II , a rate of approximately 50%-56%. Under Pigford I , approximately 69% of Track A claims were successful. The 2008 farm bill provision also mandated a moratorium on all loan acceleration and foreclosure proceedings where there is a pending claim of discrimination against USDA related to a loan acceleration or foreclosure. This provision also waives any interest and offsets that might accrue on all loans under this title for which loan and foreclosure proceedings have been instituted for the period of the moratorium. If a farmer or rancher ultimately does not prevail on her claim of discrimination, then the farmer or rancher will be liable for any interest and offsets that accrued during the period that the loan was in abeyance. The moratorium terminates on either the date the Secretary of Agriculture resolves the discrimination claim or the date the court renders a final decision on the claim, whichever is earlier. The Pigford II settlement reiterated these provisions. Questions have been raised about the number of black farmers who were or are eligible for a settlement under Pigford or Pigford II . Determining the number of African American farm operators who farmed during the period of January 1, 1981, and December 31, 1996, is difficult because of the way in which the Census of Agriculture defined farm operator. Prior to the 2002 Census of Agriculture, only principal farm operators were counted. In the 1982 Census of Agriculture, there were 33,250 African American-operated farms; in 1987, 22,954; in 1992, 18,816; and in 1997, 18,451. Essentially, the number of African American farms was treated as synonymous with the number of African American operators. These statistics, however, failed to recognize that many farms are operated by more than one farm operator. In 2002, the Census of Agriculture collected data for a maximum of three principal operators per farm. The 2002 Census enumerated 29,090 African American farm operators. This statistical change more accurately captured the actual number of operators, that is, those who are actually engaged in farming. For example, a single farm may be operated by four or more operators, each of whom could have conceivably made loan applications to USDA agencies. In addition, a farm operator might operate rented or leased land owned by a principal operator. In such a case, that operator renting or leasing farmland would not have been counted as the operator of that farm. Under the term of the consent decree, however, such a farmer could be an eligible claimant because he or she farmed or tried to farm during the requisite time period. The varying Census definitions of farm, farm operator, and farm owner help explain why the number of initial claimants in the Pigford case (approximately 94,000) was higher than the number of farms/farm operators enumerated by the Census of Agriculture between 1982 and 1997 and why the estimated number of potential Pigford II claimants may be greater than the number of farms/farm operators enumerated in those or subsequent Census counts. In addition, it is important to note that there may be other reasons for discrepancies between the number of farmers reflected in farm Census data and the number of claimants under Pigford or Pigford II . For example, individuals who attempted to farm but who were denied loans or other farm assistance would not be counted as farmers but may have been or may be eligible to file a claim under the terms of the two settlement agreements. Likewise, the estate of a deceased individual who farmed or attempted to farm during the eligibility period may be entitled to relief under either settlement, but such persons would not be counted as farm operators. Finally, due to fraud or mistake, some individuals who are not eligible may have filed or may file claims under Pigford or Pigford II , but such claims would not be entitled to an award. For example, nearly 7,000 Track A claims in Pigford (31%) were denied relief, presumably because such claims lacked merit or had other defects. Thus, the number of claims filed cannot be viewed as an accurate representation of the number of awards that have been or will be made under the two settlements. Due to long-standing congressional interest in providing relief to late-filers who did not receive assistance under the original Pigford settlement, numerous bills that would provide a remedy to black farmers who were victims of discrimination have been introduced in recent legislative sessions. For example, in the 110 th Congress, the Pigford Claims Remedy Act of 2007 ( H.R. 899 ; S. 515 ) and the African-American Farmers Benefits Relief Act of 2007 ( H.R. 558 ) were introduced to provide relief to many of these claimants who failed to have their petitions considered on the merits. The provisions of these bills were incorporated into the 2008 farm bill, providing up to $100 million for potential settlement costs. The Administration requested an additional $1.15 billion for these potential settlement costs in its FY2010 budget, but appropriators did not provide such funding in the FY2010 appropriations bill. Meanwhile, Senator Charles Grassley and Senator Kay Hagan introduced S. 972 , a bill that would have amended the 2008 farm bill to allow access to an unlimited Judgment Fund at the Department of the Treasury to pay successful claims. The legislation also would have allowed for legal fees to be paid from the fund in addition to anti-fraud protection regarding claims. A related bill in the House ( H.R. 3623 ) was also introduced by Representative Artur Davis. During the 111 th Congress, Attorney General Holder and Secretary of Agriculture Vilsack announced a settlement of the Pigford II claims. The Administration requested $1.15 billion in a 2010 supplemental appropriation ( H.R. 4899 ) for the Pigford II settlement. Senator Inouye introduced an amendment ( S.Amdt. 3407 ) to H.R. 4213 , the Tax Extenders Act of 2009, to provide the requested $1.15 billion. On March 10, 2010, the Senate voted 66-34 to invoke cloture on the bill and limit debate on the substitute being considered for amendment purposes. The vote blocked S.Amdt. 3407 as non-germane. On May 28, 2010, the House passed its version of H.R. 4213 and included the $1.15 billion for the settlement. The Senate version of the bill did not recommend the $1.15 billion, and H.R. 4213 passed without the Pigford II funding. Meanwhile, the House version of H.R. 4899 , the supplemental appropriations bill that passed the House on March 24, 2010, also included the funding for Pigford II . The Senate version of H.R. 4899 , which passed May 27, did not include the funding. Subsequently, the House passed an amended version of H.R. 4899 that included the funding on July 1. However, the Senate objected to the House version, and on July 27, the House passed the Senate's May 27 version of H.R. 4899 that did not include the funding for Pigford II . Finally, on November 19, 2010, by unanimous consent, the Senate passed the Claims Resolution Act of 2010 ( H.R. 4783 ) to provide the $1.15 billion appropriation. The Senate bill was then passed by the House on November 30 and signed by the President on December 8, 2010.

On April 14, 1999, Judge Paul L. Friedman of the U.S. District Court for the District of Columbia approved a settlement agreement and consent decree in Pigford v. Glickman, a class action discrimination suit between the U.S. Department of Agriculture (USDA) and black farmers. The suit claimed that the agency had discriminated against black farmers on the basis of race and failed to investigate or properly respond to complaints from 1983 to 1997. The deadline for submitting a claim as a class member was September 12, 2000. Cumulative data show that as of December 31, 2011, 15,645 (69%) of the 22,721 eligible class members had final adjudications approved under the Track A process, and 104 (62%) prevailed in the Track B process for a total cost of approximately $1.06 billion in cash relief, tax payments, and debt relief. Many voiced concern over the structure of the settlement agreement, the large number of applicants who filed late, and reported deficiencies in representation by class counsel. A provision in the 2008 farm bill (P.L. 110-246) permitted any claimant who had submitted a late-filing request under Pigford and who had not previously obtained a determination on the merits of his or her claim to petition in federal court to obtain such a determination. A maximum of $100 million in mandatory spending was made available for payment of these claims, and the multiple claims that were subsequently filed were consolidated into a single case, In re Black Farmers Discrimination Litigation (commonly referred to as Pigford II). On February 18, 2010, Attorney General Holder and Secretary of Agriculture Vilsack announced a $1.25 billion settlement of these Pigford II claims. However, because only $100 million was made available in the 2008 farm bill, the Pigford II settlement was contingent upon congressional approval of an additional $1.15 billion in funding. After a series of failed attempts to appropriate funds for the settlement agreement, the Senate passed the Claims Resolution Act of 2010 (H.R. 4783) to provide the $1.15 billion appropriation by unanimous consent on November 19, 2010. The Senate bill was then passed by the House on November 30 and signed by the President on December 8 (P.L. 111-291). Like the original Pigford case, the Pigford II settlement provides both a fast-track settlement process (Track A) and higher payments to potential claimants who go through a more rigorous review and documentation process (Track B). A moratorium on foreclosures of most claimants' farms will remain in place until after claimants have gone through the claims process. On October 27, 2011, the U.S. District Court for the District of Columbia granted final approval of the settlement agreement. Under the terms of the court order, claims could be submitted beginning on November 14, 2011, with a deadline for filing claims of May 11, 2012. Approximately 89,000 claim forms were mailed out. Nearly 40,000 of them ultimately were filed. Of those, approximately 34,000 were deemed complete and timely. A determination of the validity of the claims is expected to be completed in June/July 2013, after which the claims administrator will begin distributing payments to successful claimants. Preliminary estimates from the claims administrator suggest that 17,000-19,000 claims will be positively adjudicated under Pigford II, a lower proportion of successful claims than under Pigford I. This report highlights some of the events that led up to the original Pigford class action suit and the subsequent Pigford II settlement. The report also outlines the structure of both the original consent decree in Pigford and the settlement agreement in Pigford II. In addition, the report discusses the number of claims reviewed, denied, and awarded under Pigford, as well as some of the issues raised by various parties under both lawsuits. It will be updated periodically.

In response to the September 11, 2001, terrorist attacks against the United States, Congress enacted the Authorization for Use of Military Force (2001 AUMF; P.L. 107-40 ; 50 U.S.C. SS1541 note) to authorize the use of military force against those who perpetrated or provided support for the attacks. President George W. Bush identified Al Qaeda as the group that carried out the attacks, and the Taliban, then in control of the governance of Afghanistan, as harboring Al Qaeda within the territory of that country. Under the authority of the 2001 AUMF, in October 2001 President Bush sent U.S. Armed Forces to Afghanistan to conduct military operations "designed to disrupt the use of Afghanistan as a terrorist base of operations and to attack the military capability of the Taliban regime." More than 13 years later, in December 2014, President Obama declared the end of the combat mission in Afghanistan. Despite this announcement, U.S. Armed Forces remain in Afghanistan and are reportedly authorized to target Al Qaeda and the Taliban. As armed conflict against Al Qaeda and the Taliban has progressed, and U.S. counterterrorism strategy has evolved, U.S. use of military force has expanded outside Afghanistan. After the U.S. invasion of Afghanistan, many members of Al Qaeda moved out of the country and into Pakistan. In response, the United States has conducted unmanned aerial vehicle (UAV) missile strikes against Al Qaeda and Taliban targets in Pakistan. The United States has identified other groups in the Middle East and Africa that it considers "associated forces" of Al Qaeda, that is, organized forces that have entered alongside Al Qaeda in its armed conflict with the United States and its coalition partners. The United States has used force against these Al Qaeda associates in a number of other countries, including Yemen, Somalia, Libya, and most recently, Syria. In addition, the President has relied in part on the 2001 AUMF as authority for his campaign against the Islamic State (also known as ISIS or ISIL) in Iraq and Syria, and against the Khorosan Group of Al Qaeda in Syria. Since 2001, counterterrorism activities involving deployment of U.S. Armed Forces, if not always the use of military force, have steadily increased, taking place in countries around the world, although it is not clear whether the 2001 AUMF has provided authority for these activities. The 2001 AUMF, as many have argued and the executive branch has agreed, does not seem to authorize all uses of military force in furtherance of U.S. counterterrorism objectives. Although some presidential reporting to Congress suggests a wide interpretation of the scope of 2001 AUMF authority, the Obama Administration, as recently as May 2014, has stated that the 2001 AUMF authorizes only those uses of military force against Al Qaeda, the Taliban, and their associated forces, and, when such actions are taken outside of Afghanistan, only in cases of imminent threat of attack against the United States. Because the 2001 AUMF covers only some uses of military force to counter terrorist threats, other legislation and presidential powers under Article II of the Constitution provide authority to carry out U.S. counterterrorism activities globally. Some observers and Members of Congress have argued that the 2001 AUMF, focused as it is on those who perpetrated and supported the September 11, 2001, terrorist attacks, is outdated and should be repealed, as it has been stretched and perhaps distorted to fit uses of force that were not contemplated when the 2001 AUMF was enacted. Others assert that the 2001 AUMF should be updated to reflect the evolution of the terrorist threat since 2001 and the continued need to authorize the use of military force against this threat, perhaps with greater oversight and procedural requirements from Congress. The Obama Administration has indicated its willingness to address concerns about the 2001 AUMF and continued uses of military force in support of counterterrorism goals, in the past arguing that the 2001 AUMF must remain in force until combat operations end in Afghanistan. By the end of 2014, the United States and Afghanistan had finalized a bilateral security agreement, and the combat mission in Afghanistan had been declared complete. The Obama Administration, however, still finds itself relying on 2001 AUMF authority not only for continuing U.S. military operations in Afghanistan, but also for beginning a new campaign against the Islamic State in Iraq and Syria, and possibly expanding operations to other countries if the Islamic State or Al Qaeda groups or associates effectively expand their reach and pose a threat to U.S. national security and interests. The President, in his February 11, 2015, letter to Congress concerning his draft proposal for a new authorization for use of military force against the Islamic State, stated, "I remain committed to working with the Congress and the American people to refine, and ultimately repeal, the 2001 AUMF." In the face of these issues, Congress has for several years considered a number of legislative proposals to change the authority in the 2001 AUMF, the manner in which it is used, and the congressional role in its oversight and continuing existence. This process has continued in the 114 th Congress, and deliberations over the future of the 2001 AUMF have become entwined with consideration of proposals to enact a new AUMF to respond to the actions of the Islamic State in Iraq and Syria. Generally considered a broad authorization for the President to use military force against the terrorist threat posed by Al Qaeda after the September 11, 2001, terrorist attacks, the 2001 AUMF is nonetheless limited in scope, targeting only those who perpetrated or supported those attacks. Because of this limitation, the two most recent Administrations have instituted procedures to determine which actors are lawful targets of military force and in which parts of the world such force might be used under different circumstances. The effect has been U.S. uses of military force or other deployment activities in several countries, and varying as to type and scope. Shortly after the September 11, 2001, terrorist attacks on the United States, Congress enacted and President George W. Bush signed into law the 2001 AUMF. The 2001 AUMF authorizes the President to use U.S. Armed Forces to combat the nations, groups, and individuals who perpetrated the September 11, 2001, attacks and those who harbored such perpetrators. Section 2(a) of the 2001 AUMF authorizes the use of force in response to the September 11 attacks: Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, . . . . sec. 2. authorization for use of united states armed forces. (a) In General.--That the President is authorized to use all necessary and appropriate force against those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons, in order to prevent any future acts of international terrorism against the United States by such nations, organizations or persons. The authorizing language is broad in its scope concerning prevention of any future acts of terrorism perpetrated against the United States, but is circumscribed by authorizing the targeting only of those nations, organizations, or persons involved in perpetrating the September 11 attacks or harboring those who perpetrated the attacks. Although President Bush identified the terrorist group Al Qaeda and individuals within that group as the perpetrators of the attacks, and the Taliban then governing Afghanistan as the entity that harbored Al Qaeda, these actors were not specifically named in the 2001 AUMF's language. The 2001 AUMF represented a novel approach to modern-era military force authorizations, because it empowered the President to target non-state actors, even to the individual level, instead of only states. In contrast to the authorization enacted by Congress in the 2001 AUMF, the legislation originally proposed by the Bush Administration in the wake of the September 11, 2001, attacks would have provided the authority to use military force not only against Al Qaeda and the Taliban, but also to counter all terrorist threats generally, without necessitating a connection to the attacks: Resolved by the Senate and the House of Representatives of the United States of America in Congress assembled-- That the President is authorized to use all necessary and appropriate force against those nations, organizations or persons he determines planned, authorized, harbored, committed, or aided in the planning or commission of the attacks against the United States that occurred on September 11, 2001, and to deter and pre-empt any future acts of terrorism or aggression against the United States . Because Congress did not accept this broader authorization language, it can be argued that Congress deliberately chose to limit presidential authority to respond to the threat posed by those who carried out and supported the September 11, 2001, attacks, and not to other persons, nations, or groups. The continuing application of 2001 AUMF authority and its perceived expansion has led to arguments over the proper scope of 2001 AUMF authority and calls for legislative clarification of such scope. Because Congress limited the use of force to targets associated with the September 11, 2001, attacks, while according broad discretion to the President regarding whom to target, implementing the 2001 AUMF has required the creation of frameworks and procedures to determine which uses of force fall under the 2001 AUMF's authority. Prior to the U.S. military campaign against the Islamic State that began in summer 2014, executive branch officials made statements that included certain interpretations concerning the 2001 AUMF: The 2001 AUMF is primarily an authorization to enter into and prosecute an armed conflict against Al Qaeda and the Taliban in Afghanistan. The 2001 AUMF authorizes the President to use military force against Al Qaeda and the Taliban outside Afghanistan, but such uses of force must meet a higher standard of threat to the United States and must use limited, precise methods against specific individual targets rather than general military action against enemy forces. Because the 2001 AUMF authorizes U.S. involvement in an international armed conflict, the international law of armed conflict informs the authority within the 2001 AUMF. This law permits the use of military force against forces associated with Al Qaeda and the Taliban as co-belligerents; such forces must be operating in some sort of coordination and cooperation with Al Qaeda and/or the Taliban, not just share similar goals, objectives, or ideologies. According to the Obama Administration, this interpretation of the scope of 2001 AUMF authority fits within the overall framework of presidential power to use military force against those posing a threat to U.S. national security and U.S. interests. In situations where the 2001 AUMF or other relevant legislation does not seem to authorize a given use of military force or related activity, the executive branch will determine whether the President's Article II powers as Commander in Chief and Chief Executive, as interpreted by the executive branch itself, might authorize such actions. In this way, similar U.S. military action to meet U.S. counterterrorism objectives might be interpreted to fall under different authorities, of which the 2001 AUMF is just one, albeit important, example. In seeming contrast to the interpretation described above, Obama Administration officials and the President's September 2014 notifications to Congress for airstrikes and other actions in Iraq and Syria stated that the 2001 AUMF authorizes the President to order certain U.S. military strikes against the Islamic State in Iraq and Syria, as well as the Khorasan Group of Al Qaeda in Syria. This reliance on 2001 AUMF authority might represent a shift in the Administration's previously stated interpretation of that authority in at least two ways. First, the military campaign against the Islamic State seems to represent an expansion of the scope of military operations undertaken previously outside Afghanistan under 2001 AUMF authority. Second, the reasons for the military campaign seem to rest as much on (1) current U.S. policy goals for Iraq's stability; (2) the stability of the region; and (3) support for moderate rebel groups in their fight against the Islamic State, other extremist groups, and the Asad government in Syria, as they do on responding to an imminent threat to the United States, its citizens, or its personnel and facilities abroad. Acting under 2001 AUMF authority, U.S. Armed Forces began operations in Afghanistan on October 7, 2001, to neutralize the terrorist threat in that country by targeting Al Qaeda elements and infrastructure and removing the Taliban from power. The U.S. combat mission continued in Afghanistan until December 2014, including as part of NATO's International Security Assistance Force (ISAF). U.S. military action in Afghanistan continues in a reduced form in 2015. In addition, since 2001, U.S. military action against terrorist groups has expanded to several other countries. Past comments from Obama Administration officials have indicated that military actions taken under the 2001 AUMF outside Afghanistan had nonetheless been limited in scope, at least until the current military campaign against the Islamic State. For example, in May 2014, an Administration official stated that 2001 AUMF-authorized military actions had included strikes in Yemen against Al Qaeda in the Arabian Peninsula (AQAP), considered either part of or associated with Al Qaeda, and operations to kill or capture Al Qaeda members in other countries, including Yemen and Somalia. Drone strikes and other military operations in other countries, such as Pakistan and Libya, are also considered to be carried out under 2001 AUMF authority. According to information provided at intervals by the executive branch in the 13-plus years since the 2001 AUMF was enacted, the United States has engaged in counterterrorism operations including the use of military force in a number of other countries. Since the 2001 AUMF's enactment, presidential notifications to Congress have reported uses of military force, military deployments, and other activities in a number of countries and for a number of purposes, including to deploy U.S. Armed Forces and conduct military operations in several countries in a number of regions of the world, including most recently in Iraq and Syria against forces of the Islamic State and the Khorosan Group of Al Qaeda; counter generally the terrorist threat against the United States following September 11, 2001; engage terrorist groups "around the world"; engage terrorist groups "on the high seas"; detain individuals at Guantanamo Bay, Cuba, and to take other actions related to detainment decisions; and conduct trials of terrorist suspects in military commissions. These presidential notifications include language invoking either the authority or requirements of the 2001 AUMF, often in conjunction with the authorities and requirements of the War Powers Resolution ( P.L. 93-148 ; 50 U.S.C. SSSS1541-1548), which requires the President to report military deployments and the introduction of U.S. Armed Forces into hostilities, with or without congressional authorization such as that provided in the 2001 AUMF. Some notifications state that certain military actions are taken pursuant to the President's authority as Commander in Chief and Chief Executive, including the authority to carry out the 2001 AUMF's provisions. While referencing the 2001 AUMF, such notifications often simply state that such reporting is "consistent with" the requirements of the 2001 AUMF, which directs the President to make reports periodically of U.S. military actions taken pursuant to the 2001 AUMF. Several notifications reference the 2001 AUMF at the beginning or end of a longer section on counterterrorism operations, which then lists a number of activities in several countries without explaining each list item's connection to 2001 AUMF authority. As a result, it is often difficult to determine which military actions and which countries have been determined by the executive branch to fall within 2001 AUMF authority. President Obama and his Administration have publicly expressed support for possibly amending and eventually repealing the 2001 AUMF, in order to change the stance of the United States, as President Obama has termed it, "from a perpetual war-time footing." According to Administration officials, the primary importance of the 2001 AUMF has been to authorize U.S. Armed Forces to enter into armed conflict with those who carried out or supported the September 11, 2001, terrorist attacks, namely Al Qaeda and the Taliban. U.S. military operations against Al Qaeda and the Taliban occurred for more than a decade primarily in Afghanistan, and some U.S. Armed Forces currently remain there. Although the President announced the end of the U.S. military mission in Afghanistan in December 2014, he notified Congress in December 2014 that certain U.S. military operations against Al Qaeda in Afghanistan will continue pursuant to 2001 AUMF authority, and such operations have been reported in 2015. The United States and Afghanistan concluded a bilateral security agreement and status of forces agreement in late 2014, providing the basis under international law to remain in Afghanistan in a post-conflict role. The Obama Administration has stated that with the end of the U.S. combat mission in Afghanistan, it intends to work with Congress to either amend or repeal the 2001 AUMF. Administration officials have stated that any change to the 2001 AUMF should not, however, constrain the President's authority in a way that frustrates his ability to protect the United States from terrorist attacks and to meet U.S. counterterrorism objectives generally. The President has also maintained that he will oppose any attempt to legislate wider executive branch war-making authority. Instead, the Administration has proposed modernizing the counterterrorism authorities of the 2001 AUMF to precisely authorize the President to meet the current challenges posed by terrorist groups and networks around the world. Some Members of Congress have espoused this approach as well. More recently, however, these stated Administration goals for the reform or repeal of the 2001 AUMF have been thrown into doubt by statements from the President and Administration officials in connection with U.S. military operations conducted against forces of the Islamic State and the Khorasan Group of Al Qaeda in Iraq and Syria. The President, in his August 2014 notifications to Congress, indicated that his powers as Commander in Chief and Chief Executive under Article II of the Constitution gave him authority to undertake deployments and airstrikes in Iraq against IS forces. The President's September 2014 notifications to Congress for airstrikes and other actions in Iraq and Syria, however, stated that the 2001 AUMF provides authorization for certain U.S. military strikes against the Islamic State. Due to Al Qaeda's February 2014 disavowal of any remaining ties with the Islamic State, and the Islamic State's seeming lack of connection with the September 11, 2001, terrorist attacks, some experts have questioned whether the Islamic State can be targeted under the 2001 AUMF. The Obama Administration has stated that the Islamic State can be targeted under the 2001 AUMF because its predecessor organization, Al Qaeda in Iraq, communicated and coordinated with Al Qaeda; the Islamic State currently has ties with Al Qaeda fighters and operatives; the Islamic State employs tactics similar to Al Qaeda; and the Islamic State, with its intentions of creating a new Islamic caliphate, is the "true inheritor of Osama bin Laden's legacy." This interpretation seems to suggest that the Islamic State could be treated either as part of Al Qaeda that has splintered from the main group, or as an associate of Al Qaeda; under either interpretation, the Islamic State would arguably be targetable under the 2001 AUMF. Prior to the wider military campaign against the Islamic State, the Obama Administration had stated that it will use limited force against individuals and groups outside Afghanistan under 2001 AUMF authority only when they are legally defined military targets that "pose a continuing, imminent threat to U.S. persons.... " With regard to the current crisis in Iraq and Syria, the Administration has indicated that the Islamic State's threat to U.S. national security is one factor in the President's decision to conduct the current military campaign against the group. Although it is not clear whether the Administration is still adhering to this policy of limited force, the Administration might have made a determination of a "continuing, imminent threat" from the Islamic State, thus plausibly placing the current military campaign within the limited scope of 2001 AUMF authority set out by the Administration prior to the Islamic State crisis. The ongoing, indefinite, large-scale military campaign against the Islamic State, outside the Afghanistan theater of operations, however, might be seen as an executive branch policy shift toward a more expansive interpretation of 2001 AUMF authority. Without a new authorization for use of military force specifically targeting the Islamic State, it seems the President would rely heavily on 2001 AUMF authority indefinitely to prosecute the military conflict against the group. Despite this, the President has continued to make statements confirming that Administration policy remains one of amending or repealing the 2001 AUMF, including in his February 11, 2015, letter to Congress accompanying his proposal for a new authorization for use of military force against the Islamic State. The executive branch's reliance on the 2001 AUMF has raised a number of concerns among some Members of Congress and policy analysts. These concerns relate to Congress's constitutional role in declaring and funding war, as well as several executive branch activities to counter terrorism that are perceived as problematic. In contrast, Obama Administration officials have testified that the legal framework for the current conflict against Al Qaeda and associated forces, which includes the 2001 AUMF, remains valid and effective in meeting the U.S. military's requirements for conducting counterterrorism operations, even as they state that they remain open to working with Congress to amend or repeal it. Some argue that Congress, since enacting the 2001 AUMF, has in some ways abdicated its role in directing the use of U.S. military force to counter terrorist threats. Congress, some contend, authorized the use of military force in haste during the initial reaction to the September 11 attacks, and has taken little legislative action since to tailor the use of such force to current circumstances. There are ongoing concerns that under the 2001 AUMF, especially regarding the use of unmanned aerial vehicles (UAVs), transparency in executive branch actions is lacking, and that Congress has neither voiced effective demands for information, nor asserted its role in decision-making through consultation and oversight. With the President's most recent reliance on 2001 AUMF authority to prosecute the military campaign against the Islamic State, calls to repeal the 2001 AUMF and terminate any newly enacted authority within three years seem to indicate that some in Congress are intent on using the legislative process to shape the course of ongoing counterterrorism and other military operations going forward. Observers assert that by its own terms, the 2001 AUMF over time has become obsolete, as it focuses directly on preventing the perpetrators of the September 11, 2001, attacks from carrying out further attacks against the United States, most of whom by now have been killed or captured. It has been noted, however, that the 2001 AUMF remains central to the executive branch's justification for expanding efforts globally to counter terrorist threats, including continuing efforts against Al Qaeda. Administration officials assert that the 2001 AUMF is a key source of domestic legislative authority to conduct military operations against terrorist elements in any country where terrorist groups operate and plan to attack the United States or U.S. interests. The executive branch has targeted terrorist groups that are perceived by some to have only tenuous connections to those who perpetrated or supported the September 11, 2001, attacks. In perhaps the most significant expansion of military action taken pursuant to 2001 AUMF authority, the President in September 2014 cited the statute as providing legal justification for U.S. military airstrikes and other operations against forces of the Islamic State and the Khorasan Group of Al Qaeda in Iraq and Syria. Many Members of Congress, however, claim that this is a new military campaign and requires a separate congressional authorization. Several proposals for a new authorization for use of military force targeting the Islamic State have been introduced, in both the 113 th and 114 th Congresses, and the President himself has proposed a new Islamic-State AUMF. None of these proposals have been enacted into law; the President continues to rely on 2001 AUMF and other authorities. In addition to concerns about the perceived expanding scope of 2001 AUMF authority, maintaining the 2001 AUMF as current law might complicate congressional efforts to shape future authority granted to the President to use military force against other threats, such as the ongoing debate over authorizing military force against the Islamic State. Legislative proposals to authorize the use of military force against the Islamic State ("IS AUMF") have so far included a number of different provisions to limit the scope and duration of presidential authority to conduct military operations. Some are concerned that leaving the 2001 AUMF in place, with its broadly interpreted authorizing language, could neutralize any provisions in a new IS AUMF that purport to limit or otherwise shape the authority granted to the President. It could be argued that this sort of interpretation of congressionally granted authority, where multiple AUMFs are combined into one larger authority to conduct wider military operations, has already occurred, with the President relying on both 2001 and 2002 AUMF authority to conduct the current campaign against the Islamic State. In an attempt to prevent this cumulative approach to multiple AUMF authorities, at least one IS AUMF proposal introduced in the 113 th Congress stated that it constituted the sole authority to target the Islamic State militarily: "The provisions of this joint resolution pertaining to the authorization of use of force against the Islamic State of Iraq and the Levant shall supersede any preceding authorization for the use of military force." This type of provision could prove less than effective, however, if Congress chooses to take no action to amend or repeal the 2001 AUMF's authority, especially in light of the President's position that the 2001 AUMF authorizes military action against the Islamic State. In addition to concerns about the 2001 AUMF's duration and scope, certain activities have also come under debate in connection with the 2001 AUMF. The Obama Administration's increased use of UAVs to strike terrorist elements abroad, yet away from the conventional battlefield, is one of the controversial activities for which the President has invoked 2001 AUMF authority. Critics of such drone strikes state that the practice is not sufficiently transparent, leaving the public and Congress without the information necessary to determine the propriety of the strikes through effective oversight. Moreover, critics argue that expanded UAV use targets far too many individuals, including low-level terrorist operatives as well as U.S. citizens abroad, raising constitutional due process concerns in the latter case. Collateral casualties and damage are also causes for concern. Because UAV strikes often are discrete incursions into foreign air space completed in short periods of time, and do not involve placing U.S. personnel in harm's way, some observers believe that the requirements of the War Powers Resolution for congressional consultation and authorization will become obsolete through the employment of this new remote warfare technology. Many observers object to the detention practices of the U.S. government regarding terrorism suspects and enemy combatants, including U.S. citizens, citing allegedly inhumane conditions at the Guantanamo facilities, the use of rendition to foreign governments, the indefinite nature of detention in many cases, the constitutional due process concerns such practices raise, and issues with the government's choices of military or civilian judicial venues for prosecution in different cases. Some government officials have indicated in recent years that U.S. military uses of force on U.S. territory could be authorized under the 2001 AUMF, sparking criticism. It is argued that because the 2001 AUMF does not contain explicit authorizing language for the use of force "within the United States," it does not meet applicable legal requirements for using the U.S. military domestically under the Posse Comitatus Act, which states that the military cannot be used on U.S. territory to execute the law unless expressly authorized by the Constitution or an act of Congress. Obama Administration officials have stated that they believe domestic uses of military force would be permitted only in the most extraordinary circumstances, and when such action is necessary to neutralize an identified domestically based threat to U.S. national security. Although this eventuality remains unlikely, the issue of whether the 2001 AUMF or any other authorization for use of military force can be legitimately interpreted to authorize domestic military action without specific authorizing language could remain a concern. Some Members of Congress have supported legislative options to repeal, amend, or replace the 2001 AUMF, while others defend leaving it as is. Some of the key arguments being made in support of or against these options are considered below. According to the Department of Defense, the 2001 AUMF provides authority to meet all U.S. military requirements to respond effectively and flexibly to terrorist threats globally, and allows the military to meet threats in conformity with domestic law and the international laws of war. Proponents of maintaining the 2001 AUMF as it stands state that it is important to ensuring the United States can continue to respond with force to terror threats. Repealing or narrowing the 2001 AUMF might remove legal authority to conduct certain counterterrorism efforts, and could undo authority to detain enemy combatants at Guantanamo Bay and elsewhere. Proponents of the status quo state that because the threat of terrorism will continue years into the future, the broad congressionally mandated authority in the 2001 AUMF is important to ensuring political legitimacy and the public's support for counterterrorism efforts. Some have argued, however, that counterterrorism operations will likely continue to expand in geographical and operational scope, and that Congress should take action to have a role in directing the course of using force against terrorist groups into the future. Others assert that maintaining the 2001 AUMF as is could provide an effective means of constraining presidential powers to conduct military operations against terrorist groups over time, for the very reason that its language is limited to those involved in the September 11, 2001, terrorist attacks, a list of groups and individuals that will arguably continue to dwindle as the numbers of those directly connected with the September 11, 2001, attacks diminishes. According to this view, if Congress were to leave the 2001 AUMF in place, uses of military force under 2001 AUMF authority will become increasingly constrained over time. Many argue that repealing the 2001 AUMF is necessary for a number of reasons: the President announced in December 2014 that the military combat mission in Afghanistan had ended, and in other circumstances Congress has passed legislation formally ending war authority for other conflicts; the fight against terrorist groups has been improperly expanded and extended to the point that there are no effective restraints on presidential power in this area; and more emphasis should be placed on counterterrorism efforts that do not involve military force, such as disruption of terrorist financing and communications, economic development and assistance programs to populations vulnerable to terrorist influence, and law enforcement actions to arrest and prosecute terrorist suspects. In addition, some argue that repeal would limit presidential authority to use force against terrorist groups to the powers contained in Article II of the Constitution and the international law of self-defense, standards that might in some cases be more restrictive than the authority in the 2001 AUMF. On the other hand, other observers claim that repeal would essentially ensure continued expansion of presidential Article II powers, as it would be expected that presidential uses of military force against terrorist groups would continue solely under Article II auspices. Some also oppose the repeal of the 2001 AUMF for reasons discussed in the prior section, including the belief that the 2001 AUMF is a necessary and appropriate measure to respond to ongoing terrorist threats. Proposals to amend or replace the 2001 AUMF on the whole contemplate creating authority that is significantly more detailed than the general language of the 2001 AUMF, whether that detail restricts or expands presidential power to use force against terrorist elements globally. Proposals to restrict presidential power include setting out criteria that must be met to (1) introduce U.S. Armed Forces into another country; (2) conduct UAV strikes against terrorist targets, including U.S. citizens abroad; (3) detain and prosecute terrorist suspects; and (4) use military force in the United States. It has been suggested that a sunset clause should be included, as well as provisions to define the circumstances under which the threat of terrorist attack is neutralized and the authority to use force no longer adheres. Similar to the argument to repeal the 2001 AUMF, leaving the President with more limited Article II powers, are proposals for a new authorization that merely reiterates that the President's only powers to use force to counter terrorism emanate from these limited Article II powers to defend against imminent attack on the United States, or to international law of self-defense. Others respond to these recommendations by warning that any restrictions placed on the President to prevent perceived overreach might restrict the U.S. military's flexibility in responding to emerging and changing terrorist threats in the future. Alternatively, and not necessarily exclusive from proposals to restrict authority to use force, some Members recommend that Congress consider expanding or updating presidential authority to use force against terrorists. These recommendations include updating language to detail new uses of force, such as UAVs and cyberwarfare, and specifying new terrorist groups that might not have ties to al Qaeda but still pose a threat to the United States. Some counter, however, that any update or expansion of authorities would further enshrine in law the idea of perpetual authorized war. They argue as well that new authorities might encourage Presidents to expand uses of force in undesirable ways, or to use armed force as a first resort, and that a new congressional imprimatur to continue the "war on terror" might produce a negative reaction from the international community, including U.S. allies. Any expansion of authorities specifically granting presidential power to conduct preventive war, it is asserted, would set an unfortunate precedent for an unfettered executive branch with the authority to kill anyone associated with terrorism, no matter how remote the threat to the United States; invade any country harboring terrorists who might someday attack the United States; and detain people indefinitely without due process of law. One set of recommendations suggests providing a new authorization for the use of force against terrorist elements. This new authorization would set forth general legislative criteria for such uses of force, but it would also require the executive branch to identify targeted groups and geographic areas through an administrative process that includes congressional notification and waiting periods before becoming effective. This administrative process would operate much like the State Department's Foreign Terrorist Organization identification process. Any such authorization would include specific criteria for using force, as well as precise definitions for key terms, such as "belligerent" and "imminent threat." Any such authorization would also require the executive branch to provide post-action reporting on any exercise of force under the authorization, and to assess a terrorist group's designation on a regular basis. Over the past few Congresses, a number of legislative proposals contained provisions to sunset or repeal the 2001 AUMF, or to limit the use of appropriated funds to carry out the 2001 AUMF's provisions. These proposals were not enacted into law. With the advent of the Islamic State crisis and the U.S. military response, many proposals affecting the 2001 AUMF introduced late in the 113 th Congress and early in the 114 th Congress have been included in proposals for a new authorization for use of military force against the Islamic State or are otherwise related to that crisis. Current proposals specifically concerning the 2001 AUMF include the following: On February 2, 2015, Representative Adam Schiff introduced the Authorization for Use of Military Force Against ISIL Resolution ( H.J.Res. 27 ). The resolution would repeal the 2001 AUMF three years after the resolution's enactment. On February 10, 2015, Representative Barbara Lee introduced the Comprehensive Solution to ISIL Resolution ( H.J.Res. 30 ), which would repeal the 2001 AUMF as well as the 2002 AUMF. Repeal would become effective 60 days after enactment. Senator Ben Cardin introduced the Sunset of the 2001 Authorization for Use of Military Force Act ( S. 526 ) on February 12, 2015. The bill would repeal the 2001 AUMF three years upon enactment. On March 4, 2015, Representative Barbara Lee introduced the Repeal of the Authorization for Use of Military Force ( H.R. 1303 ), which would repeal the 2001 AUMF 180 days after enactment. Past enacted legislation concerning the 2001 AUMF has generally confirmed executive branch claims of authority under the 2001 AUMF, such as provisions included in the 2006 and 2009 acts related to military commissions, and the National Defense Authorization Act, Fiscal Year 2012 (NDAA 2012; P.L. 112-81 ). Section 1021 of the NDAA 2012 includes the term "associated forces" with regard to detentions of terrorist suspects; some claim that term has been effectively adopted into the authorities of the 2001 AUMF to justify broader authority for military action against loosely affiliated groups.

In response to the September 11, 2001, terrorist attacks against the United States, Congress enacted the Authorization for Use of Military Force (2001 AUMF; P.L. 107-40; 50 U.S.C. SS1541 note) to authorize the use of military force against those who perpetrated or provided support for the attacks. Under the authority of the 2001 AUMF, U.S. Armed Forces have conducted military operations in Afghanistan since October 2001. As armed conflict against Al Qaeda and the Taliban progressed, and U.S. counterterrorism strategy evolved, U.S. use of military force has expanded outside Afghanistan to include Al Qaeda and Taliban targets in Pakistan, Yemen, Somalia, Libya, and most recently, Syria. The 2001 AUMF is not the sole authority for all U.S. uses of military force in furtherance of U.S. counterterrorism objectives; other legislation and presidential powers under Article II of the Constitution are invoked to carry out U.S. counterterrorism activities globally. Nevertheless, the Obama Administration still finds itself relying on 2001 AUMF authority not only for continuing U.S. military operations in Afghanistan, but also for beginning a new campaign against the Islamic State in Iraq and Syria, with the possibility of expansion to other countries if the Islamic State or Al Qaeda groups or associates effectively expand their reach and pose a threat to U.S. national security and interests. At the same time, the President has requested that Congress enact new authority for U.S. operations to counter the Islamic State and has expressed a continued commitment to "working with the Congress and the American people to refine, and ultimately repeal, the 2001 AUMF." As the United States has engaged in counterterrorism and other military operations against Al Qaeda, the Taliban, and other terrorist and extremist groups over the past 13-plus years, many Members of Congress and legal and policy analysts have questioned the continuing reliance on the 2001 AUMF as a primary, effective authority for U.S. military action in a number of countries. Some have asserted that the 2001 AUMF has become outdated, unsuited to the challenge of countering terrorism and extremism in a changed world, at times claiming that the executive branch has relied on the 2001 AUMF for military action outside its intended scope. Congress has for several years considered a number of legislative proposals to change the authority in the 2001 AUMF (by amending or repealing the law), the manner in which it is used, and the congressional role in its oversight and continuing existence. This process continues in the 114th Congress, and deliberations over the future of the 2001 AUMF have become entwined with consideration of proposals to enact a new authorization for use of military force to respond to the turmoil caused by the actions of the Islamic State in Iraq and Syria. Debate in Congress over the status of the 2001 AUMF may evolve in response to numerous developments overseas and U.S. policy responses. For further information on the Islamic State crisis, the U.S. response, and proposals to enact a new AUMF targeting the Islamic State, see CRS Report R43612, The "Islamic State" Crisis and U.S. Policy, by [author name scrubbed] et al., and CRS Report R43760, A New Authorization for Use of Military Force Against the Islamic State: Issues and Current Proposals in Brief, by [author name scrubbed].

Budgets for the Department of State and the Broadcasting Board of Governors (BBG), as well as U.S. contributions to United Nations (U.N.) International Organizations, and U.N. Peacekeeping, are in the State, Foreign Operations Appropriations in both the House and Senate. Intertwined with the annual appropriations process is the biannual Foreign Relations Authorization that, by law, Congress must pass prior to the State Department's expenditure of its appropriations. The Administration sent its FY2008 budget request to Congress on February 5, 2007. The requested funding level for the Department of State is $10,013.8 million, representing a 10.5% increase over the FY2007 estimate, but a decline of 4.3% as compared with the FY2006 actual appropriation (the most recent enacted appropriation for the Department of State), including rescissions and supplementals. For international broadcasting, the FY2008 request of $668.2 million represents a 3.8% increase over the FY2007 estimate, but a 1.7% decline from the FY2006 level, including rescissions and supplementals. Along with the FY2008 budget request, the White House sent to Congress two supplemental funding requests--one for FY2007 amounting to $1,168 million for State and $10 million for international broadcasting; another for FY2008 amounting to $1,934.6 million for the Department of State. Both requests are primarily for U.S. operations in Iraq and Afghanistan. The House passed its supplemental emergency funding bill ( H.R. 1591 , H.Rept. 110-60 ) on March 23, 2007. It contains $1.3 billion for the Department of State's Iraq operations, security, exchanges and international peacekeeping and $10 million for international broadcasting. The Senate passed its version of H.R. 1591 ( S.Rept. 110-37 ) on March 29, 2007. The Senate bill includes $1.1 billion for State Department operations in Iraq, security, exchanges, international organizations and peacekeeping. Like the House bill, the Senate also provides $10 million for international broadcasting. The House and Senate passed the conference report ( H.Rept. 110-107 ) on April 25 th and 26 th , respectively. The President vetoed the supplemental on May 1 st . Congress was unable to override the veto. In February 2006, the President sent to Congress his FY2007 budget request totaling $9,502.4 million for State and $671.9 million for international broadcasting. A week after, he sent two FY2006 supplemental requests to Congress with more than $1,702 million for the Department of State and the Broadcasting Board of Governors. The 109 th Congress passed $1,737.7 million in supplemental funding for the Department of State and international broadcasting, but did not enact regular appropriations for State and the Broadcasting Board of Governors. The President signed the supplemental measure into law ( P.L. 109-234 ) on June 15, 2006. Rather than enact regular appropriations, the 109 th Congress passed a series of continuing resolutions (CR) with funding based on the lesser of either the FY2006 amount or the House-passed or Senate-passed FY2007 levels. The last CR extended funding through February 15, 2007. The 110 th Congress passed the FY2007 appropriation ( H.J.Res. 20 ) and it was signed into law ( P.L. 110-5 ) February 15, 2007. Table 1 provides regular and supplemental State Department and related agencies' appropriations for FY2005, FY2006 (including the FY2006 Emergency Supplemental), FY2007 estimates, and the FY2008 request. Both the FY2007 and FY2008 supplemental requests are included, as well. On January 18, 2006, Secretary of State Condoleezza Rice announced her vision for U.S. diplomacy in the 21 st Century. She said that, to match President Bush's bold mission of "supporting democracy around the world with the ultimate goal of ending tyranny in our world," the United States needs "an equally bold diplomacy that not only reports about the world as it is, but seeks to change the world itself." The Secretary referred to this as "transformational diplomacy." Specific aspects of Secretary Rice's Transformational Diplomacy include: Global repositioning--Beginning in FY2006 and continuing through FY2007, the Department of State has decided on more than 200 positions to be moved largely from Europe and Washington, DC, to critical areas in Africa, South Asia, East Asia, the Middle East and elsewhere in FY2007. Additional jobs will be targeted by the summer. Regional focus--The Department is creating regional public diplomacy centers in Europe and the Middle East, as well as regional centers for information technology to perform management support activities such as human resources or financial management. Localization--American Presence Posts (APP) will be operated by one diplomat working away from the embassy in key population centers of a country; Virtual Presence Posts (VPP) will provide an Internet site enabling millions of local citizens, particularly young people, to interact with embassy personnel. IT Centralization will provide the State Department workforce with real-time and cutting-edge information whether at their desks or traveling. Creative use of the Internet will enhance America's presence through the Internet interactive online discussions such as Cafe USA/Seoul. Plans for new skills challenges include enhanced training for technology and languages; multi-region expertise requiring diplomats to be experts in at least two regions and fluent in two languages; post assignments criteria that diplomats must serve in at least one of the more challenging posts; hands on practice for diplomats to be more involved in helping foreign citizens, promoting democracy, running programs, starting businesses, improving healthcare, and reforming education, and public diplomacy to be recognized as an important part of every diplomat's job. Empowerment of diplomats to work with other federal agencies--especially with the military. Within the Department of State's FY2008 budget, the Administration is requesting $124.8 million for Transformational Diplomacy. Included is $39.9 million for repositioning of jobs, $20.8 million for language, public diplomacy, and technology training, $34.5 million for Foreign Service modernization, and $15 million for public diplomacy. The FY2007 budget request included $102.8 million for Transformational Diplomacy. Currently, the U.S. Embassy in Iraq has over 1,000 American and locally engaged staff representing about 12 agencies. 156 U.S. direct hires and 155 locally engaged staff represent the Department of State (DOS) in the U.S. Mission. The bulk of the FY2007 and FY2008 supplemental requests would fund State Department operations in Iraq. Of a total FY2007 State Department appropriation supplemental request of $1,168 million, $823.9 million would fund U.S. operations, security, and mission in Iraq. Other supplemental funding would include $21.9 million for public diplomacy to combat violent extremism in Muslim populations and diplomacy efforts in the Sudan; $67.2 million for security upgrades in Afghanistan and Sudan; $35 million for the Special Inspector General for Iraq Reconstruction; $20 million for educational and cultural exchange programs to combat violent extremism; and $200 million for unforeseen U.N. international peacekeeping activities. Additionally, $71.5 million for migration and refugee assistance, and $30 million for emergency migration and refugee assistance are in the request. Also, the Administration is requesting $10 million for the Broadcasting Board of Governors to expand Arabic language broadcasting in 22 countries on Alhurra Television. The House passed its supplemental emergency funding bill ( H.R. 1591 , H.Rept. 110-60 ) on March 23, 2007. It contains $1.3 billion for the Department of States Iraq operations, security, exchanges and international peacekeeping and $10 million for international broadcasting. The Senate passed its version of H.R. 1591 ( S.Rept. 110-37 ) on March 29, 2007. The Senate bill includes $1.1 billion for State Department operations in Iraq, security, exchanges, international organizations and international peacekeeping. Like the House bill, the Senate bill also provides $10 million for international broadcasting. The House and Senate passed the conference report ( H.Rept. 110-107 ) on April 25 th and 26 th , respectively. The President vetoed the supplemental on May 1 st . Congress was unable to override the veto. (For more details on the FY2007 emergency supplemental, see CRS Report RL33900, FY2007 Supplemental Appropriations for Defense, Foreign Affairs, and Other Purposes , coordinated by [author name scrubbed].) Of the $1,934.6 million FY2008 emergency funding request, $1,881.6 million is for ongoing U.S. Mission operations in Iraq and $53 million would fund U.N. Assistance Missions in Afghanistan and in Iraq. In addition, $35 million is in the request for Migration and Refugee Assistance. Last year the Bush Administration requested an FY2006 Emergency Supplemental of $1,497 million within State's Diplomatic and Consular Programs budget account to cover Iraq operations and security. The House and Senate passed the emergency supplemental conference report ( H.R. 4939 . H.Rept. 109-494 ) in June 2006. The final measure included $1,529.4 million for D&CP in Iraq, $25.3 million for State's Inspector General, $5.0 million for exchanges in Iran, $178 million for U.N. peacekeeping, and $36.1 million for international broadcasting in Iran. The President signed the measure into law ( P.L. 109-234 ) on June 15, 2006. The State Department's mission is to advance and protect the worldwide interests of the United States and its citizens through the staffing of overseas missions, the conduct of U.S. foreign policy, the issuance of passports and visas, and other responsibilities. Currently, the State Department coordinates with the activities of 50 U.S. government agencies and organizations in operating more than 260 posts in over 180 countries around the world. Currently, the State Department employs approximately 30,000 people, about 60% of whom work overseas. Highlights follow. Diplomatic and Consular Programs (D&CP) --The D&CP account funds overseas operations (e.g., motor vehicles, local guards, telecommunications, medical), activities associated with conducting foreign policy, passport and visa applications, regional bureaus, under secretaries, and post assignment travel. Beginning in FY2000, the State Department's Diplomatic and Consular Program account included State's salaries and expenses, as well as the technology and information functions of the former USIA and the functions of the former ACDA. For D&CP's FY2008 budget, the Administration is requesting $4,942.7 million, 14.5% above the estimated FY2007 level, but a 13.2% decline from the FY2006 funding level of $5,692.3 million, reflecting rescissions and supplementals. Within the FY2008 request, $964.8 million is designated for worldwide security upgrades. The estimated FY2007 funding level is $4,314.0 million, of which more than $700 million is for supporting worldwide security upgrades. Embassy Security, Construction and Maintenance (ESCM) --This account supports the maintenance, rehabilitation, and replacement of overseas facilities to provide appropriate, safe, secure and functional facilities for U.S. diplomatic missions abroad. Early in 1998, Congress had enacted $640 million for this account for FY1999. However, following the embassy bombings in Africa in August 1998, Congress agreed to more than $1 billion (within a supplemental funding bill) for the Security and Maintenance account by establishing a new subaccount referred to as Worldwide Security Upgrades. The Administration request for FY2008 seeks $792.5 million for regular ESCM and $806.9 million for worldwide security upgrades, for a total account level of $1,599.4 million, a 7.4% increase over both the FY2007 and FY2006 ESCM total appropriations level of $1,489.7 million, reflecting rescissions. Educational and Cultural Exchanges --This account funds programs authorized by the Mutual Educational and Cultural Exchange Act of 1961, such as the Fulbright Academic Exchange Program, as well as leadership programs for foreign leaders and professionals. Government exchange programs came under close scrutiny in past years for being excessive in number and duplicative. After the September 11 th attacks, the Department of State began to emphasize public diplomacy activities in Arab and Muslim populations. The Bush Administration is requesting $486.4 million for exchanges in FY2008. This represents a 9.1% increase over the FY2007 estimate and a 12.8% increase over the FY2006 enacted level of $431.3 million. In addition, Congress, in the FY2006 appropriation, designated $329.7 million in the D&CP funds go for public diplomacy. The estimated FY2007 funding level for public diplomacy within D&CP is unclear at this time. The Capital Investment Fund (CIF) --CIF was established by the Foreign Relations Authorization Act of FY1994/95 ( P.L. 103-236 ) to provide for purchasing information technology and capital equipment which would ensure the efficient management, coordination, operation, and utilization of State's resources. The FY2008 budget request includes $70.7 million for CIF, which is 21.7% higher than both the enacted FY2006 and estimated FY2007 levels of $58.1 million. The request seeks no funding for the Centralized Information Technology Modernization Program which was funded in FY2006 at $68.5 million. In addition, the FY2006 conference report (H. Rept 109-272) stated that the conferees expect $116 million from expedited passport fee collections would be used for Technology Investments in FY2006. The Revised Continuing Appropriation Resolution, FY2007 ( P.L. 110-5 ) explicitly stated no funding would be provided for the Centralized Information Technology Modernization Program in FY2007. In recent years, U.S. contributions to the United Nations and its affiliated agencies (CIO) and peacekeeping operations (CIPA) have been affected by a number of issues. These have included the withholding of funds related to international family planning policies; issues related to implementation of the Iraq Oil for Food Program and the findings and recommendations of the Volcker Committee Inquiry into that program; alleged and actual findings of sexual exploitation and abuse by personnel in U.N. peacekeeping operations in the field and other misconduct by U.N. officials at U.N. headquarters in New York and at other U.N. headquarters venues; and efforts to develop, agree to, and bring about meaningful and comprehensive reform of the United Nations organization, in most of its aspects. Since 2004, congressional attention has often been directed to ways to ensure comprehensive U.N. reform, through legislative proposals fashioned after extensive hearings. Current legislative issues remaining include followup and oversight of reforms initiated by the United Nations membership in September 2005 and throughout its fall General Assembly session and the possibility of increasing the 25% legislative cap on U.S. contributions to U.N. peacekeeping assessments to 27.1%. (For more detail, see CRS Report RL33611, United Nations System Funding: Congressional Issues , by [author name scrubbed] and [author name scrubbed].) Contributions to International Organizations (CIO) --CIO provides funds for U.S. membership in numerous international organizations and for multilateral foreign policy activities that transcend bilateral issues, such as human rights. Maintaining a membership in international organizations, the Administration argues, benefits the United States by advancing U.S. interests and principles while sharing the costs with other countries. Payments to the U.N. and its affiliated agencies, the Inter-American Organizations, as well as other regional and international organizations, are included in this account. The President's FY2008 request totaling $1,354.4 million for this account represents a 17.6% increase over the estimated FY2007 level and the FY2006 enacted appropriation of $1,151.3 million. Contributions to International Peacekeeping Activities (CIPA) --The United States supports multilateral peacekeeping efforts around the world through payment of its share of the U.N. assessed peacekeeping budget. The President's FY2008 request totals $1,107.0 million. This represents nearly a 4% decline from the FY2006 actual funding level of $1,152.1 million and a smaller decline of 2.5% below the estimated FY2007 CIPA funding level of $1,135.3 million. The International Commissions account (although not in the 150 account but is in the State Department budget) includes the U.S.-Mexico Boundary and Water Commission, the International Fisheries Commissions, the International Boundary Commission, the International Joint Commission, and the Border Environment Cooperation Commission. The FY2008 request of $113.5 million represents a 100.8% increase over the FY2006 level of $66.5 million and a 99% increase over the estimated FY2007 level of $67 million. The increase is largely due to a water treatment project near San Diego, California. The Asia Foundation-- The Asia Foundation is a private, nonprofit organization that supports efforts to strengthen democratic processes and institutions in Asia, open markets, and improve U.S.-Asian cooperation. The Foundation receives both government and private sector contributions. Government funds for the Asia Foundation are appropriated to, and pass through, the State Department. The Administration request for FY2008 is $10 million, the same as requested a year earlier, but 27.5% below the enacted FY2006 level of $13.8 million (with rescissions). The estimated funding level for FY2007 is $13.8 million for the Asia Foundation. The International Center for Middle Eastern-Western Dialogue Trust Fund --The conferees added language in the FY2004 conference agreement for the Consolidated Appropriations Act, FY2004 to establish a permanent trust fund for the International Center for Middle Eastern-Western Dialogue. The act provided $6.9 million for perpetual operations of the Center which is to be located in Istanbul, Turkey. Despite the fact that the Administration did not request any FY2005 funding for this Center, Congress provided $7.3 million for it in FY2005. The Administration requested spending $850,000 of interest and earnings from the Trust Fund for program funding in FY2006, but Congress set the appropriated level at $5 million. For FY2007, the Administration requested appropriation authority to spend $750,000 of interest and earnings from the Trust Fund to be used for programming activities and conferences at the Center. The FY2008 budget contains no request for the Trust and $875,000 for the program account. National Endowment for Democracy (NED) --The National Endowment for Democracy, a private nonprofit organization established during the Reagan Administration, supports programs to strengthen democratic institutions in more than 90 countries around the world. NED proponents assert that many of its accomplishments are possible because it is not a government agency. NED's critics claim that it duplicates U.S. government democracy programs and either could be eliminated or could operate entirely with private funding. The Administration's FY2008 budget request of $80 million for NED is the same as its FY2005, FY2006, and FY2007 requests. The FY2008 request represents an 8.1% increase over the enacted $74.0 million (after rescissions) for FY2006. In addition, however, the 109 th Congress created a Democracy Fund in the FY2006 Foreign Operations Appropriations ( P.L. 108-102 ) which provided an additional $15.25 million for NED that year. The estimated FY2007 funding level is estimated to be $74 million. East-West and North-South Centers --The Center for Cultural and Technical Interchange between East and West (East-West Center), located in Honolulu, Hawaii, was established in 1960 by Congress to promote understanding and cooperation among the governments and peoples of the Asia/Pacific region and the United States. The Center for Cultural and Technical interchange between North and South (North-South Center) is a national educational institution in Miami, FL, closely affiliated with the University of Miami. It promotes better relations, commerce, and understanding among the nations of North America, South America and the Caribbean. The North-South Center began receiving a direct subsidy from the federal government in 1991. The Administration's FY2008 request is for $10 million for the East-West Center, a decrease of 47.4% from the FY2006 funding level of $19.0 million (including rescissions), and no funds for the North-South Center. The FY2007 funding level is currently set at $19 million. The United States International Broadcasting Act of 1994 reorganized within USIA all U.S. government international broadcasting, including Voice of America (VOA), Broadcasting to Cuba, Radio Free Europe/Radio Liberty (RFE/RL), Radio Free Asia (RFA), and the Middle East Broadcasting Network. The 1994 Act established the Broadcasting Board of Governors (BBG) to oversee all U.S. government broadcasting; abolished the Board for International Broadcasting (BIB), the administering body of RFE/RL; and recommended that RFE/RL be privatized by December 31, 1999. This recommendation was repealed by P.L. 106-113 . During the reorganization debate in 1999, the 105 th Congress agreed that credibility of U.S. international broadcasting was crucial to its effectiveness as a public diplomacy tool. Therefore, Congress agreed not to merge broadcasting functions into the State Department, but to maintain the Broadcasting Board of Governors (BBG) as an independent agency as of October 1, 1999. For FY2008 international broadcasting activities the President is requesting $668.2 million, an increase of 3.8% over the FY2007 estimate of $644 million, but a decrease of 1.7% from the FY2006 enacted level of $679.6 million, including rescissions and supplementals. Of the $668.2 million request, $618.8 million would be for broadcasting operations, such as VOA, $10.7 million for Capital Improvements, and $38.7 million for Broadcasting to Cuba. The BBG is planning to eliminate several VOA services including Uzbek, Greek, and Cantonese as well as the RFE/RL Macedonia service. BBG also plans to reduce several others, such as VOA and RFE/RL service in Ukrainian, Tibetan, and Romanian. Reportedly, eleven former VOA directors are appealing to Congress to reverse the proposed Administration cuts. At the same time, BBG's FY2008 request would increase Middle East Broadcasting network funds by some $20 million. The State Department traditionally has had sole authority to issue visas overseas. The Homeland Security Act of 2002 ( H.R. 5005 / P.L. 107-296 , signed into law on November 25, 2002) now provides the Secretary of the Department of Homeland Security (DHS) with exclusive authority to: 1) issue regulations regarding administering and enforcing visa issuance, 2) impose upon any U.S. government employee, with consent of the head of his/her agency, any functions involved in visa issuance, 3) assign DHS employees to each overseas post where visas are issued, and 4) use the National Foreign Affairs Training Center to train DHS employees who will be involved in visa issuance. The act states that these authorities will be exercised through the Secretary of State. The Homeland Security Act of 2002 further provides the Secretary of State and consular officers with the authority to refuse visa applications. The act stipulates that within one year after the act is signed, the Secretary of DHS and the Secretary of State must report to Congress on implementation of visa issuance authorities and any proposals that are necessary to improve the activities surrounding visa issuance. Specifically regarding visa issuance in Saudi Arabia, the act stipulates that upon enactment of the act, the third party screening program in Saudi Arabia will terminate, but on-site personnel of the DHS shall review all visa applications prior to adjudication there. The Department of State has authority to use machine readable visa fees in its expenditures. In recent years funds amounted to $602.9 million for FY2004; for FY2005 it was $668.1 million; for FY2006 it was $772.8 million; for FY2007 the estimate is $747.6 million; and the request for FY2008 is $862 million. The fees are typically used for State Department border security programs, technology, and personnel.

State Department funding, formerly in the House Science, State, Justice, Commerce (SSJC) Appropriations Subcommittee, is now aligned in both the House and Senate Appropriations Subcommittees on State-Foreign Operations. In addition to passing annual appropriations, foreign relations authorization legislation is required authorizing the Department of State to spend its appropriations. The 110th Congress is expected also to work on foreign authorization legislation this year. The President sent his FY2008 budget to Congress on February 5, 2007. Included was the Department of State FY2008 budget request for $10,013.8 million--4.3% below the FY2006 level of $10,467.9 million, including rescissions and supplementals, but 10.5% above the FY2007 estimate of $8,964.1 million. The international broadcasting FY2008 budget request totals $668.2 million--a 1.7% decline from the FY2006 level, including rescissions and supplementals, but a 3.8% increase over the FY2007 estimate of $644 million. Along with the regular budget request, the Administration is requesting two emergency supplementals: an FY2007 supplemental request including $1,168 million for State and $10 million for international broadcasting and an FY2008 emergency funding request of $1,934.6 million for the Department of State. Both supplementals are largely for operations in Iraq and Afghanistan. In March, 2007, both the House and the Senate passed separate versions of the FY2007 supplemental funding (H.R. 1591, H. Rept 110-60 and S. Rept 110-37) including more than $1,168.0 million dollars for the Department of State operations and $10 million for international broadcasting. On April 25th and 26th, Congress passed H.R. 1591, including $1,265.2 million for State Dept operations in Iraq and $10.0 million for international broadcasting. The President vetoed the supplemental on May 1st. Congress was unable to override the veto. For FY2007, the President sent his budget request to Congress on February 6, 2006, seeking $9,502.4 million for the Department of State and $671.9 million for international broadcasting. The House passed its bill (H.R. 5672) on June 29, 2006. The Senate did not pass its bill (H.R. 5522). After several continuing resolutions, the 110th Congress enacted appropriations by passing the Revised Continuing Appropriations Resolution, FY2007 (H.J.Res. 20). It was signed into law (P.L. 110-5) on February 15, 2007. In January 2006, Secretary of State Rice presented her "Transformational Diplomacy" vision of the way the State Department will conduct foreign policy. Among other things, decisions have been made to reposition more than 200 jobs primarily from Europe and Washington, DC, to more challenging locations worldwide.

As the role of lawyers in most countries has evolved from advocates regulated by local courts and their rules to legal advisors for transactions in economic activities, the increase in cross-border provision of legal services led to the inclusion of such services in the trade agreements and negotiations under the WTO, over the objections of some countries. The scope of agreements under the WTO has expanded over the years to cover issues and sectors not traditionally considered to fall within trade laws and regulations through periodic multilateral negotiations that are called "rounds," the latest being the Doha Round. The commitments the United States has made and may make in current and future negotiations could affect domestic regulation of the legal profession, including ethical issues. Legal services are classified as part of professional services, which in turn are under the business services sector covered by the General Agreement on Trade in Services (GATS), concluded as part of the Uruguay Round of the General Agreement in Tariffs and Trade that created the WTO. Under the GATS, WTO countries undertake obligations with regard to all service sectors, including most-favored-nation treatment (MFN) under GATS Article II; transparency under GATS Article III; the notice and publication of relevant domestic laws and measures; judicial or administrative review of domestic regulation under GATS Article VI(2); and recognition agreements under GATS Article VII. In addition to the general obligations under the GATS, the United States included legal services in its schedule of commitments under the GATS; not all WTO countries included legal services in their schedules. Such schedules set forth specific additional obligations made by a WTO country with respect to specific service sectors, including any limitations or qualifications to obligations undertaken. These obligations include market access under GATS Article XVI, national treatment under GATS Article XVII, and any other additional commitments under GATS Article XVIII, including those regarding qualifications, standards or licensing matters. A schedule also summarizes obligations as they apply via four modes of supply--(1) cross-border supply, the ability of non-resident service suppliers to supply services cross-border into a WTO country; (2) consumption abroad, the ability of a WTO country's residents to buy services located in another WTO country; (3) commercial presence, the ability of foreign service suppliers to establish a branch or representative office in a WTO country, sometimes referred to as the right of establishment; and (4) movement of natural persons, the ability of foreign individuals to enter and stay in a WTO country's territory to supply a service. The U.S. schedule sets forth its obligations in terms of limitations and qualifications under the laws and/or rules governing the practice of law by foreign lawyers and foreign law firms in each of the States, the District of Columbia, the U.S. territories, and before certain federal agencies, such as patent prosecution before the U.S. Patent and Trademark Office (USPTO). As part of the sectors subject to WTO negotiations in the Doha Round, legal services are potentially subject to changes. Indeed, several members have sought concessions from the United States regarding legal services. Such changes could affect the laws and rules governing foreign lawyers and foreign law firms in each of the 50-plus jurisdictions in the United States and the federal agencies. Such laws and rules comprise the bar admission of lawyers who are admitted to practice in a foreign jurisdiction or who are foreign nationals and the eligibility of foreign legal consultants and foreign firms to provide legal services in the United States. Rules regarding foreign legal consultants may address the applicability to such consultants of ethics rules and disciplinary procedures for attorneys. The European Union, which together with the United States has the most active trade in legal services among WTO members, is seeking several new legal services concessions from the United States. One significant change sought by the European Union is to eliminate the requirement in the U.S. states and territories that qualified U.S. lawyers providing legal services must be "natural persons," not law firms or other organizational/corporate persons. This apparently is not a requirement in some other WTO countries. The EU and the United States also propose eliminating the U.S. requirement that an attorney admitted to the patent bar for the purpose of prosecuting a patent before the USPTO must be a U.S. citizen. In addition, there has been consideration of whether disciplines (WTO parlance for certain guidelines) on domestic regulation in the legal services sector should be adopted and applied. This may be accomplished by negotiation of a discipline specific to legal services or by application of the existing Disciplines on Domestic Regulation in the Accountancy Sector to legal services. Under GATS Article VI(4), disciplines on domestic regulation are developed "[w]ith a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services." Disciplines aim to ensure that requirements are not more burdensome than necessary to ensure quality of service and that licensing procedures are not per se restrictions on the supply of the service. After the accountancy disciplines were developed and adopted, there was active consideration and debate about whether they should be extended to legal services, which the International Bar Association recommended against. Any substantive Doha Round concessions or any agreement to a legal services discipline by the United States would obligate it, under GATS Article I(3)(a), to take reasonable measures to ensure that each of its political subdivisions observes such agreements. This could pose federalism issues, since the rules governing practice in a state are a matter for the highest court of a state or for its legislature and not traditionally a matter for federal legislation or policy. The U.S. Trade Representative (USTR) does not make WTO commitments with which the United States is not in a position to comply. This is the reason the current schedule of commitments notes obligations in terms of which states have certain requirements, such as in-state residency for licensure. In accordance with SS102 of the Uruguay Round Agreements Act (URAA), the USTR has consulted with several states concerning the negotiating position of the United States on legal services, apparently to consider what changes these states would be amenable to observing. If the United States were to commit to liberalizing the rules for foreign lawyers or firms to provide legal services in the United States, any related complaint against the United States could be brought only by another WTO country and would be resolved through the WTO dispute settlement system. An individual foreign attorney or firm could not bring a complaint because disputes can only be brought by one WTO country against another WTO country. Nor could an individual attorney or firm bring a suit domestically for noncompliance with a WTO obligation. WTO agreements are not self-executing international agreements, so obligations under those agreements must be implemented through domestic legislation or other domestic measures. Section 102 of the Uruguay Round Agreements Act (URAA) provides that only the United States may bring an action to declare a state law invalid because it is inconsistent with an Uruguay Round agreement and that no private person may challenge a state or local law or other measure on the grounds that it is not consistent with an Uruguay Round agreement. The global nature of business, including legal services, and its continued growth has necessitated the consideration and adoption of rules concerning multijurisdictional practice of law. In 2007, 71 persons were licensed as foreign legal consultants in the United States across 16 jurisdictions. Twenty-nine jurisdictions have a rule permitting the licensing of foreign legal consultants. Some adopted a version of the ABA Model Rule on Foreign Legal Consultants (first approved in 1993, most recently revised in 2006), itself modeled on the New York rule first adopted in 1974. Others adopted their own rule differing significantly from the ABA Model Rule. The ABA Model Rule provides that foreign legal consultants may be licensed to provide certain legal services in a jurisdiction without an examination, if they are members in good standing in a recognized legal profession in a foreign country. They are not actually admitted as members of the bar in the host jurisdiction in the United States and are prohibited from providing certain services, such as appearing in court to represent a client or giving advice on U.S. law or a state law in the United States. Foreign legal consultants would be able to provide advice on the laws of their foreign home countries. Additionally, five jurisdictions have rules that expressly refer to temporary practice by foreign lawyers, some similar to the ABA Model Rule for Temporary Practice by Foreign Lawyers (approved in 2002). This ABA Model Rule provides that foreign lawyers not admitted in a U.S. jurisdiction may provide legal services in that jurisdiction in certain circumstances, including, among others, where they are working with a lawyer admitted to practice in that jurisdiction or where they are advising clients with regard to legal proceedings in a foreign jurisdiction where they are admitted to practice. The WTO Secretariat has noted that WTO countries generally require foreign legal consultants to submit to the local code of ethics as a prerequisite to licensing in the host country. The WTO has observed that the legal profession does not consider this a major obstacle to trade in legal services. There are certain common principles shared by the national legal ethical codes, including rules on conflicts of interest, loyalty to the client, and confidentiality. The WTO has observed, for example, that the EU has developed a common legal ethics code applicable to some EU countries; the U.S., Japanese and European lawyers' professional associations have compared their ethical codes and found no serious differences; and a bilateral agreement exists between the ABA and its counterpart for England and Wales with regard to mutual recognition on matters such as ethical standards. However, the agreements of such associations are not binding on the U.S. jurisdictions whose courts or legislatures would implement such recognition in conjunction with the bar disciplinary authorities. Negotiations in the Doha Round of the WTO could help resolve ethical issues that have arisen in the cross-border provision of legal services. The prohibition against the unauthorized practice of law is a basic tenet of U.S. legal ethics; therefore, any new agreement under WTO auspices that may affect the regulation of legal services providers admitted to the practice of law in a foreign jurisdiction could have implications for ethical compliance. However, U.S. legal ethics rules or codes have recognized that business demands and the mobility of society necessitate refraining from unreasonable territorial limitations. Any liberalizing of licensing requirements could facilitate the operations of law firms. ABA Opinion 01-423, dated September 21, 2001, found that U.S. law firms may include partners who are foreign lawyers, as long as the arrangement complies with U.S. and foreign law, and the foreigners are members of a recognized legal profession in the foreign jurisdiction. It cautioned that U.S. lawyers must avoid assisting in the unauthorized practice of law by foreign lawyers in the United States. ABA Opinion 01-423 further noted that many countries recognize only a narrow attorney-client privilege. Some legal authorities cite the opinion in a European Union (EU) case, Australian Mining & Smelting Europe Ltd. v. Commission , as supporting the proposition that attorney-client privilege does not apply to attorneys not admitted to practice in the EU. In response, the ABA passed a resolution that attorney-client privilege should apply to non-European Union attorneys. In a more recent case, Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v Commission , the EU Court of First Instance declined to consider whether the discriminatory non-recognition of privilege with respect to non-EU lawyers violated certain EU principles. A paper summarizing a discussion on Cross-Border Travel Traps: Protecting Client Confidences at the Frontier at the ABA Section of International Law 2007 Fall Meeting discusses the problems posed for U.S. attorneys by the narrower European view of profession privilege/confidentiality with regard to attorney-client communications. With regard to disciplinary measures and proceedings, U.S. legal professional groups have submitted letters to the USTR supporting local disciplinary jurisdiction over foreign attorneys and disciplinary reciprocity with foreign jurisdictions in Doha Round negotiations.

This report provides a broad overview of the treatment of legal services under the World Trade Organization (WTO) agreements and its potential effect on laws and rules governing the provision of legal services by foreign lawyers in the United States and legal ethics rules.

In the more than 15 years since gaining independence, Estonia's political scene has been characterized by the creation and dissolution of numerous parties and shifting alliances among them. This has often resulted in politics resembling a game of "musical chairs." Estonian governments have lasted on average only slightly longer than a year each. Nevertheless, due to a wide-ranging policy consensus, Estonia has followed a remarkably consistent general course--building a democracy, a free-market economy, and integrating into NATO and the European Union (EU). Estonia's current government, formed after March 2007 parliamentary elections, is led by Prime Minister Andrus Ansip of the center-right Reform Party. His coalition partners are the conservative and nationalist Pro Patria-Res Publica Union and the center-left Social Democratic Party. The government's priorities include cutting taxes, reducing business and labor regulation, and increasing spending on child care and education. In September 2006, Toomas Hendrik Ilves was chosen as Estonia's President by an electoral college composed of members of the Estonian parliament and local government representatives. The result was a blow to the left-of-center Center Party and People's Union, which had aggressively campaigned for the re-election of incumbent Arnold Ruutel. Ilves was born in the United States. After Estonia regained its independence in 1991, he moved to Estonia, and later served as Ambassador to the United States and Foreign Minister. In these posts he became known as an outspoken defender of Estonia's interests, especially against Russian encroachment. The post of President is largely ceremonial, but it plays a role in defining Estonia's international image, as well as in expressing the country's values and national unity. Estonia has one of the most dynamic economies in central Europe, and indeed in Europe as a whole. Its real Gross Domestic Product (GDP) grew by 11.4% in 2006 and 9.9% in the first quarter of 2007. Due to its use of a currency board that strictly ties Estonia's kroon to the euro, Estonia has pursued a stringent monetary policy. However, inflation remains significant, at a 5.5% rate in April 2007, on a year-on-year basis, a result of increasing energy prices and rapid wage growth. Unemployment in April 2007 was estimated at 5.3%, one of the lowest rates in the EU. The country is on target for a budget surplus of 1.9% of GDP in 2007, due in part to prudent fiscal policies and rising revenues fostered by economic growth. Estonia has a flat income tax rate of 22%. The new government has pledged to cut the tax rate by 1% per year until it reaches 18% in 2011. President Bush praised Estonia's tax system during a visit to the country in November 2006. According to the State Department, Estonia's "excellent" business climate, along with its sound economic policies, have ensured strong inflows of foreign direct investment (FDI). Estonia was ranked 12 th in the world in the 2007 Wall Street Journal/Heritage Foundation Index of Economic Freedom. The survey praised the country for the fairness and transparency of its business regulations and foreign investment codes, and the independence of its judiciary in enforcing property rights. Corruption remains a problem in Estonia, but significantly less so than in other countries in the region. Total FDI inflows to Estonia in 2004 were $850 million, a large amount for a very small country. Companies owned in whole or part by foreigners account for one-third of the country's GDP and over half of its exports. The country has a modern banking system, largely controlled by banks from the Nordic countries. It has developed an innovative technology sector. Estonians played a key role in developing software for the popular Skype Internet phone. Prime Minister Ansip gave President Bush a Skype phone during his visit to Estonia in November 2006. Estonia achieved its two key foreign policy objectives when it joined NATO and the European Union in 2004. Estonia continues to try to bring its armed forces up to NATO standards, and has maintained defense spending at over 2% of GDP. Estonia was perhaps the best prepared of the candidate states in central and eastern Europe to join the EU, due to its successful economic reforms. However, Estonia still lags behind most EU members in many areas, and receives substantial EU funding to address such issues as border security, public infrastructure, and the environment. Estonia has had to put off plans to adopt the euro as its currency until 2011, due to an inflation rate above the EU's strict criteria for euro zone membership. Estonia enjoys a close relationship with its Baltic neighbors and the Nordic countries. It has acted as an advocate for democratic and pro-Western forces in Belarus, Ukraine, Moldova, Georgia, and other countries bordering Russia. Estonia's relations with Russia remain difficult. Russia claims that Estonia violates the human rights of its Russian-speaking minority, which makes up about 30% of the country's population. While international organizations have generally rejected these charges, many Russian-speakers remain poorly integrated into Estonian society, despite Estonian government efforts to deal with the problem. Some 130,000 Russian-speakers in Estonia are stateless, about 10% of the population. Over 100,000 more have adopted Russian citizenship. They are denied Estonian citizenship by Estonian law because they or their ancestors were not Estonian citizens before the Soviet takeover of Estonia in 1940 and they have not successfully completed naturalization procedures, which require a basic knowledge of the Estonian language. As a result, a significant portion of Estonia's population cannot vote in national elections and lack some other rights and opportunities accorded to citizens. In addition, at least part of the Russian-speaking population suffers from higher unemployment and lower living standards than ethnic Estonians do, due to a variety of factors, including inability to speak Estonian, which is required by Estonian law for many jobs. Russia has also expressed irritation at NATO's role in patrolling the airspace of Estonia and the other two Baltic states, and Estonia's failure to join the Conventional Forces in Europe (CFE) treaty. The role of Estonia in the transit of Russian oil through its ports, once key to Estonia's economy, may be reduced by the decision by the Russian government-controlled Transneft oil transit company to expand the use of its own port facilities at Primorsk in Russia. Estonia is heavily dependent on Russia for oil and natural gas supplies. Estonia and other states in Central Europe have expressed concern about the Nord Stream natural gas pipeline which, when completed, will link Germany directly with Russia via the Baltic Sea floor. In addition to environmental concerns, they fear Russia will gain additional political and economic leverage over the region once Russia has an alternative to key energy infrastructure that runs through their territories. Russo-Estonian relations deteriorated sharply in April 2007, when Estonia moved "the Bronze Soldier," a World War II-era statue of a Soviet soldier from a park in the capital, Tallinn, to another location, along with the bodies of Red Army soldiers buried nearby. The move provoked a furious reaction among some ethnic Russians in Estonia, and from Russian government leaders, who viewed the action as dishonoring Red Army soldiers who liberated Estonia from the Nazis. For their part, many Estonians see the "liberation" as the exchange of Nazi domination for a Soviet one, and not worthy of prominent commemoration. In addition to harsh verbal attacks from Moscow, harassment of Estonia's ambassador to Moscow by youth groups with close ties to the Kremlin, and violent demonstrations by hundreds of ethnic Russians in Estonia, Estonia's Internet infrastructure came under heavy attack from hackers in late April and early May. Estonian officials said some assaults came from Russian government web servers, although many others came from all over the world. These cyberattacks were particularly damaging to Estonia, which has integrated the Internet into public life perhaps more than almost any country in the world. Estonia has asked for Russia's cooperation in investigating the origin of the cyberattacks. The Russian government has denied involvement in the attacks. At the invitation of the Estonian government, NATO cyber experts visited Estonia in the wake of the attacks to assess their scope and discuss with their Estonian counterparts how to deal with possible future attacks. Estonian officials have called for greater cooperation in the EU and NATO to find practical ways of combating cyberattacks. They note that the EU and NATO have yet to define what constitutes a cyberattack and what the responsibilities of member states are in such cases. Russia also appears to have imposed unannounced economic sanctions on Estonia; Estonian railway officials reported a sharp drop in freight traffic from Russia, and Russia limited traffic over a key highway bridge between the two countries. Russia attributed these actions to repair work and safety concerns. Observers have noted that these actions fit a pattern in Russian foreign policy toward neighboring countries of interrupting energy, transportation, and other links under various pretexts to punish these countries for perceived anti-Russian behavior. U.S. officials have expressed concern about Russia's statements and actions surrounding the statue's relocation. On June 14, Assistant Secretary of State Daniel Fried said that" threats, attacks, [and] sanctions, should have no place" in Russo-Baltic relations and that warned that the Baltic states "will never be left alone again, whether threatened by old, new, or virtual threats..." The United States and Estonia enjoy excellent relations. The United States played a key role in advocating NATO membership for Estonia and the other two Baltic states, against the initial resistance of some European countries, which feared offending Russia. U.S. officials have lauded Estonia's support in the U.S.-led war on terrorism, including its deployments in Afghanistan and Iraq. Estonia has deployed 105 soldiers to Afghanistan, as part of the International Security Assistance Force, a significant force for a small country. Two Estonian soldiers were killed there in June 2007. There are 40 Estonian soldiers deployed in Iraq. Two Estonian soldiers have died in Iraq. Estonia also contributes troops to EU and NATO-led peacekeeping missions in Bosnia and Kosovo. In November 2006, President Bush visited Estonia. He praised Estonia as a "strong friend and ally of the United States" and expressed appreciation for Estonia's contributions in Afghanistan, Iraq, and in training young pro-democracy leaders in Georgia, Moldova, and Ukraine. Addressing perhaps the most difficult issue in U.S.-Estonian relations, he pledged to work with Congress to extend the U.S. Visa Waiver program to Estonia and other countries in Central and Eastern Europe. The program, in which 27 countries (mainly from western Europe) participate, allows persons to visit the United States for business or tourism for up to 90 days without a visa. In order to join the program, a country must have a visa refusal rate of no more than 3% a year, and must also have or plan to have tamper-resistant, machine-readable passport and visa documents. Estonia does not currently meet these standards, although it is attempting to do so. Some believe that Estonians should enjoy visa-free travel to the U.S., in part due to their country's status as an EU member and to their troop contributions in Iraq and Afghanistan. After a meeting in Washington, DC with President Ilves on June 25, 2007, President Bush said that Ilves had "pushed him very hard" on the visa waiver issue. President Bush added that he would continue to seek Congressional action on extending the Visa Waiver program to Estonia. President Bush said that the two leaders had also discussed the cyberattacks on Estonia and that Ilves had suggested that a NATO "center of excellence" be based in Estonia to study cybersecurity issues. Estonia "graduated" from U.S. economic assistance after FY1996, due to its success in economic reform, but the United States continues to provide other aid to Estonia. In FY2006, Estonia received $5.8 million in U.S. aid, mainly in Foreign Military Financing (FMF) and IMET military education and training funds to improve Estonia's interoperability with U.S. and other NATO forces in peacekeeping and other missions. The Administration requested $4.1 million for the same purposes for FY2008.

After restoration of its independence in 1991, following decades of Soviet rule, Estonia made rapid strides toward establishing a democratic political system and a dynamic, free market economy. It achieved two key foreign policy goals when it joined NATO and the European Union in 2004. However, relations with Russia remain difficult. Estonia suffered cyberattacks against its Internet infrastructure in April and May 2007 during a controversy about the removal of a Soviet-era statue in Estonia. Estonian leaders believe the cyberattacks may have been instigated by Moscow. Estonia and the United States have excellent relations. Estonia has deployed troops to Iraq and Afghanistan, and plays a significant role in efforts to encourage democracy and a pro-Western orientation among post-Soviet countries. This report will be updated as needed.

Dozens of temporary tax provisions expired at the end of 2013, and several other temporary tax provisions are scheduled to expire at the end of 2014. The American Taxpayer Relief Act (ATRA; P.L. 112-240 ), signed into law on January 2, 2013, reduced tax policy uncertainty by permanently extending most of the tax cuts first enacted in 2001 and 2003 and permanently indexing the alternative minimum tax (AMT) for inflation. ATRA, however, did not eliminate uncertainty in the tax code. Under ATRA, a number of provisions that had been allowed to expire at the end of 2011 or 2012 were temporarily extended through 2013. Thus, under current law, these provisions expired at the end of 2013. Collectively, temporary tax provisions that are regularly extended by Congress rather than being allowed to expire as scheduled are often referred to as "tax extenders." Many of these "tax extender" provisions have been temporarily extended multiple times. The research tax credit, for example, has been extended 15 times since being enacted in 1981. Most of the temporary tax provisions that expired at the end of 2013 were previously extended more than once. The 113 th Congress has considered legislation that would extend selected expired or expiring tax provisions. The Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act ( S. 2260 ), which would extend most expired and soon-to-expire tax provisions through 2015, was reported by the Senate Finance Committee on April 28, 2014. The act subsequently became an amendment to H.R. 3474 which did not advance in the Senate, as a motion to end debate on H.R. 3474 was voted down on May 15, 2014. In contrast to the Senate, the House has voted to permanently extend certain expired tax provisions as part of the Jobs for America Act ( H.R. 4 ), which passed the House on September 18, 2014. Several expired charitable-related provisions would be made permanent as part of the America Gives More Act of 2014 ( H.R. 4719 ), which passed the House on July 17, 2014. Chairman Camp supports addressing extenders as part of broader tax reform. His proposed Tax Reform Act of 2014 would make certain provisions permanent, such as the research and experimentation (R&D) tax credit and increased expensing under Section 179. The President's FY2015 Budget proposal would permanently extend or modify certain expired provisions, while temporarily extending others. Proposals that would be permanently extended (and in some cases modified) include (1) the enhanced deduction for conservation easements; (2) increased expensing under Section 179; (3) the exclusion for qualified small business stock; (4) the new markets tax credit (NMTC); (5) the renewable electricity production tax credit (PTC); (6) the deduction for energy-efficient commercial property; (7) the research and experimentation (R&D) tax credit; and (8) the Work Opportunity Tax Credit (WOTC). Proposals that would be temporarily extended include (1) the exclusion for cancellation of home mortgage debt (through 2016); (2) the tax credit for cellulosic biofuel (through 2024); and (3) the tax credit for energy-efficient new homes (through 2024). The President's FY2015 Budget also assumes that the American opportunity tax credit (AOTC), the earned income tax credit (EITC) expansions, and the child tax credit (CTC) expansions, that were extended through 2017 as part of ARTA, are made permanent. Allowing temporary tax provisions to expire at the end of 2013 does not necessarily mean that these tax provisions will not be available to taxpayers in 2014. In recent years, Congress has chosen to retroactively extend expired tax provisions. Under ATRA, for example, a number of tax provisions that had been allowed to expire at the end of 2011 were retroactively extended through 2013. This report provides a broad overview of the tax extenders. Additional information on specific extender provisions may be found in other CRS reports, including the following: CRS Report R43510, Selected Recently Expired Business Tax Provisions ("Tax Extenders") , by [author name scrubbed], [author name scrubbed], and [author name scrubbed] CRS Report R43688, Selected Recently Expired Individual Tax Provisions ("Extenders"): In Brief , by [author name scrubbed] CRS Report R43517, Recently Expired Charitable Tax Provisions ("Tax Extenders"): In Brief , by [author name scrubbed] and [author name scrubbed] CRS Report R43541, Recently Expired Community Assistance Related Tax Provisions ("Tax Extenders"): In Brief , by [author name scrubbed] CRS Report R43449, Recently Expired Housing Related Tax Provisions ("Tax Extenders"): In Brief , by [author name scrubbed] The tax code presently contains dozens of temporary tax provisions. In the past, legislation to extend some set of these expiring provisions has been referred to by some as the "tax extender" package. While there is no formal definition of a "tax extender," the term has regularly been used to refer to the package of expiring tax provisions temporarily extended by Congress. Oftentimes, these expiring provisions are temporarily extended for a short period of time (e.g., one or two years). Over time, as new temporary provisions have been routinely extended and hence added to this package, the number of provisions that might be considered "tax extenders" has grown. There are various reasons Congress may choose to enact temporary (as opposed to permanent) tax provisions. Enacting provisions on a temporary basis, in theory, would provide Congress with an opportunity to evaluate the effectiveness of specific provisions before providing further extension. Temporary tax provisions may also be used to provide relief during times of economic weakness or following a natural disaster. Congress may also choose to enact temporary provisions for budgetary reasons. Examining the reason why a certain provision is temporary rather than permanent may be part of evaluating whether a provision should be extended. There are several reasons why Congress may choose to enact tax provisions on a temporary basis. Enacting provisions on a temporary basis provides an opportunity to evaluate effectiveness before expiration or extension. However, this rationale for enacting temporary tax provisions is undermined if expiring provisions are regularly extended without systematic review, as is the case in practice. In 2012 testimony before the Senate Committee on Finance, Dr. Rosanne Altshuler noted that an expiration date can be seen as a mechanism to force policymakers to consider the costs and benefits of the special tax treatment and possible changes to increase the effectiveness of the policy. This reasoning is compelling in theory, but has been an absolute failure in practice as no real systematic review ever occurs. Instead of subjecting each provision to careful analysis of whether its benefits outweigh its costs, the extenders are traditionally considered and passed in their entirety as a package of unrelated temporary tax benefits. Several temporary tax provisions that had previously been extended a number of times were allowed to expire during the 112 th Congress (see the " Tax Extenders in the 112th Congress " section below). Arguably, certain incentives were not extended as it was determined that their benefit did not exceed the cost. For example, tax incentives for alcohol fuels (e.g., ethanol), which can be traced back to policies first enacted in 1978, were not extended beyond 2011. The Government Accountability Office (GAO) had previously found that with the renewable fuel standard (RFS) mandate, tax credits for ethanol were duplicative and did not increase consumption. Tax policy may also be used to address temporary circumstances in the form of economic stimulus or disaster relief, for example. Economic stimulus measures might include bonus depreciation or generous expensing allowances. Various tax policies have also been enacted to provide relief following natural disasters. Recent examples of other temporary provisions that have been enacted to address special economic circumstances include the exclusion of mortgage forgiveness from taxable income during the recent housing crisis, the payroll tax cut, and the Section 1603 grants in lieu of tax credits to compensate for weak tax-equity markets during the economic downturn. It has been argued that provisions that were enacted to address a temporary situation should be allowed to expire once the situation is resolved. Congress may also choose to enact tax policies on a temporary basis for budgetary reasons. If policy makers decide that legislation that reduces revenues must be paid for, it is easier to find resources to offset short-term extensions rather than long-term or permanent extensions. Additionally, by definition the Congressional Budget Office (CBO) assumes under the current law baseline that temporary tax cuts expire as scheduled. Thus, the current law baseline does not assume that temporary tax provisions are regularly extended. Hence, if temporary expiring tax provisions are routinely extended in practice, the CBO current law baseline would tend to overstate projected revenues, making the long-term revenue outlook stronger. Thus, by making tax provisions temporary rather than permanent, these provisions have a smaller effect on the long-term fiscal outlook. Temporary tax benefits are a form of federal subsidy that treats eligible activities favorably compared to others, and channels economic resources into qualified uses. Extenders influence how economic actors behave and how the economy's resources are employed. Like all tax benefits, economic theory suggests every extender can be evaluated by looking at the impact on economic efficiency, equity, and simplicity. Temporary tax provisions may be efficient and effective in accomplishing their intended purpose, though not equitable. Alternatively, an extender may be equitable but not efficient. Policy makers may have to choose the economic objectives that matter most. Extenders often provide subsidies to encourage more of an activity than would otherwise be undertaken. According to economic theory, in most cases an economy best satisfies the wants and needs of its participants if markets allocate resources free of distortions from taxes and other factors. Market failures, however, may occur in some instances, and economic efficiency may actually be improved by tax distortions. Thus, the ability of extenders to improve economic welfare depends in part on whether or not the extender is remedying a market failure. According to theory, a tax extender reduces economic efficiency if it is not addressing a specific market failure. An extender is also considered relatively effective if it stimulates the desired activity better than a direct subsidy. Direct spending programs, however, can often be more successful at targeting resources than indirect subsidies made through the tax system such as tax extenders. A tax is considered to be fair when it contributes to a socially desirable distribution of the tax burden. Tax benefits such as the extenders can result in individuals with similar incomes and expenses paying differing amounts of tax, depending on whether they engage in tax-subsidized activities. This differential treatment is a deviation from the standard of horizontal equity, which requires that people in equal positions should be treated equally. Another component of fairness in taxation is vertical equity, which requires that tax burdens be distributed fairly among people with different abilities to pay. Most extenders are considered inequitable because they benefit those who have a greater ability to pay taxes. Those individuals with relatively less income and thus a reduced ability to pay taxes may not have the same opportunity to benefit from extenders as those with higher income. The disproportionate benefit of tax expenditures to individuals with higher incomes reduces the progressivity of the tax system, which is often viewed as a reduction in equity. An example of the effect a tax benefit can have on vertical equity is illustrated by two teachers who have both incurred $250 in classroom-related expenses and are eligible to claim the above-the-line deduction for expenses. Yet the tax benefit to the two differs if they are in different tax brackets. A teacher with lower income, who may be in the 15% income tax bracket, receives a deduction with a value of $37.50, while another teacher, in the 33% bracket, receives a deduction value of $82.50. Thus, the higher-income taxpayer, with presumably greater ability to pay taxes, receives a greater benefit than the lower-income taxpayer. Extenders contribute to the complexity of the tax code and raise the cost of administering the tax system. Those costs, which can be difficult to isolate and measure, are rarely included in the cost-benefit analysis of temporary tax provisions. In addition to making the tax code more difficult for the government to administer, complexity also increases costs imposed on individual taxpayers. With complex incentives, individuals devote more time to tax preparation and are more likely to hire paid preparers. The Congressional Budget Office (CBO) provides estimated costs of extending all tax provisions scheduled to expire before 2024 (see Table 1 ). CBO's estimates can be viewed as the cost of a long-term extension. The cost of a short-term extension, as proposed in the EXPIRE Act, is presented in Table 2 below. The cost of permanent extension of certain provisions as passed by the House can be found in Table 3 below. According to CBO's estimates, over the 2014 to 2024 budget window, extending all expiring tax provisions would cost $963.4 billion; extending temporary provisions that expired in 2013 would cost $762.1 billion; extending bonus depreciation would cost $296.4 billion; and extending expansions to the child tax credit, the earned income tax credit, and the American Opportunity Tax Credit currently scheduled to expire at the end of 2017 would cost $165.4 billion. This cost of extending "all other expiring provisions" includes the extension of all provisions scheduled to expire in 2013 (see Table 1 and the associated discussion below) as well as those scheduled to expire in years between 2013 and 2024. However, most of the cost of extension (79%) is associated with provisions that expired at the end of 2013. Since tax extender provisions are assumed to expire as scheduled by CBO, their extension--even if expected by policy makers--is not included in CBO's current law revenue baseline. As a result, CBO's revenue projections are higher than actual revenue levels that are likely to occur. Consequently, projected budget deficits under the current law baseline are smaller than actual deficits that are likely to occur. The President's FY2015 budget uses a baseline that assumes that the American Opportunity Tax Credit (AOTC), expansions to the earned income tax credit (EITC), and child tax credit (CTC) are made permanent. The baseline in the President's FY2015 budget, which assumes certain policies are extended, collects less revenue than CBO's current law baseline. The cost of providing a short-term extension, as proposed in the EXPIRE Act (discussed below), is less than the cost of extending expiring provisions through the budget window, as is done by CBO for the purposes of constructing the alternative fiscal scenario baseline. CBO scores, some might argue, provide a more accurate measure of the budget impact of temporary tax provisions. The JCT scores reflect the budget impact of the temporary extension relative to current law. If expiring provisions are temporarily extended, the 10-year revenue cost may be less than the cost in year 2015, as many of the expired provisions are tax deferrals, or timing provisions. Bonus depreciation is one example of a timing provision, where the short-term cost of extension is greater than the long-term or budget window cost. Extending 50% bonus depreciation would reduce revenues by $73.6 billion in 2015, while the cost over the 10-year budget window is $2.9 billion. Dozens of temporary tax provisions expired at the end of 2013 (see Table 2 ). Many of these provisions have been extended as part of previous "tax extender" legislation. For the purposes of this report, expiring provisions have been classified as belonging to one of six categories: individual, business, charitable, energy, community development, or disaster relief. The following sections provide additional details on expiring provisions within each category. Table 2 also notes which provisions would be extended by the EXPIRE Act. Table 2 also includes the 10-year (or budget window) cost of the extension through 2015, as proposed in the EXPIRE Act. All but one of the individual provisions that expired at the end of 2013 have been extended at least once. The longest-standing individual provision that has previously been extended is the above-the-line deduction for classroom expenses incurred by school teachers. This provision was first enacted on a temporary basis in 2002 and has regularly been included in tax extender packages. Other individual provisions that have been extended more than once include the deduction for state and local sales taxes, the above-the-line deduction for tuition and related expenses, the deduction for mortgage insurance premiums, and the parity for the exclusion of employer-provided mass transit and parking benefits. The one provision that has not been extended in the past, the health coverage tax credit, was first enacted without an expiration date as part of the Trade Act of 2002 ( P.L. 107-240 ). A January 1, 2014, termination date was enacted as part of an act to extend the Generalized System of Preferences in 2011 ( P.L. 112-40 ). Although the health care coverage credit would not have been extended as part of the chairman's mark of the EXPIRE Act, a two-year extension was agreed to during the April 3, 2014, Senate Finance Committee markup. All but one of the business provisions that expired at the end of 2013 have been extended at least once. Most of the business provisions scheduled for expiration in 2013 have been extended more than once. Long-standing provisions that are scheduled for expiration include the research tax credit, the rum excise tax cover-over, the Work Opportunity Tax Credit, and the active financing exception under Subpart F. Bonus depreciation and enhanced expensing allowances, which are often viewed as economic stimulus measures, are also scheduled to expire at the end of 2013. The April 1, 2014, chairman's mark of the EXPIRE Act proposed extending most of the expired business provisions. The three provisions that were not included in the April 1, 2014, proposal--the look-through treatment of payments between controlled foreign corporations, the seven-year amortization for motorsports racing facilities, and the special expensing rules for film and television production--were included in the modification release on April 3, 2014. All of the business-related provisions listed in Table 2 would be extended in the EXPIRE Act as reported by the Senate Finance Committee. The House has also voted to make permanent several business-related extenders (see " Tax Extenders Legislation in the 113th Congress " below). The four charitable provisions that expired at the end of 2013 have previously been extended multiple times. Provisions providing an enhanced deduction for non-corporate businesses donating food inventory were first enacted in response to Hurricane Katrina in 2005. The remaining charitable provisions set to expire were first enacted as part of the Pension Protection Act of 2006 ( P.L. 109-280 ). The April 1, 2014, chairman's mark of the EXPIRE Act would extend three of the four charitable provisions that expired at the end of 2013. The April 3, 2014, modification proposed extending the special rule for contributions of capital gain real property for conservation purposes. All four charitable provisions would be extended through 2015 in the EXPIRE Act as reported by the Senate Finance Committee. The House has also voted on July 17, 2014, to make permanent the four charitable-related extenders (see " Tax Extenders Legislation in the 113th Congress " below). The longest-standing energy-related provision that expired at the end of 2013 is the renewable energy production tax credit (PTC). This provision was first enacted in 1992. Several of the temporary energy-related tax provisions that are scheduled to expire at the end of 2011 were first enacted as part of the Energy Policy Act of 2005 (EPACT05; P.L. 109-58 ). These include the credit for construction of energy efficient new homes, the credit for energy efficient appliances, the deduction for energy-efficient commercial buildings, and the credit for nonbusiness energy property (also known as the tax credit for energy efficiency improvements for existing homes). Certain tax incentives for alternative technology vehicles and alternative fuel vehicle refueling property were also first included in EPACT05. Six energy-related provisions were excluded from the April 1, 2014, chairman's mark of the EXPIRE Act, although three of these provisions were included in the modification released on April 3, 2014, and one other included in the version of the EXPIRE Act that was reported by the Senate Finance Committee. The three provisions that had been excluded from the chairman's mark but were added in the modification are the PTC and the provisions for residential and commercial energy efficiency. The special rule related to the reporting of income from electric transmission restructurings was included in the EXPIRE Act as reported by the Senate Finance Committee. Energy-related provisions that would not be extended include tax credits for manufacturers of energy-efficient appliances and the placed in service date for partial expensing of certain refinery property. All four of the community development provisions that expired at the end of 2013 have been extended more than once. Qualified zone academy bonds (QZABs) are tax credit bonds available to state and local governments for elementary and secondary school renovation, equipment, teacher training, and course materials. QZABs were first made available in 1998. The New Markets Tax Credit (NMTC), designed to promote investment in low-income and impoverished communities, was first enacted in 2000. Tax incentives designed to encourage economic activity in the American Samoa and empowerment zones are also scheduled to expire at the end of 2013. The chairman's mark of the EXPIRE Act included extensions of the provisions related to QZABs, the NMTC, and the American Samoa economic development credit. The EXPIRE Act, as reported by the Senate Committee on Finance, included an extension of the empowerment zone tax incentives as well as modifications to the NMTC to allow unused allocations to be used for a manufacturing communities tax credit. Disaster relief tax provisions that expired at the end of 2013 are those that provide tax-exempt bond financing authority for facilities in the New York Liberty Zone and provisions related to nonrecognition of gain for areas damaged by the 2008 Midwestern storms. Several other temporary disaster relief provisions have been allowed to expire in recent years. Neither of the disaster relief provisions that expired in 2013 are included in the EXPIRE Act. In addition to the provisions that expired at the end of 2013, six tax provisions are scheduled to expire at the end of 2014. Three of these provisions are energy-related: (1) incentives for alternative fuels and alternative fuel mixtures involving liquefied hydrogen; (2) the credit for fuel cell motor vehicles; and (3) the credit for hydrogen alternative fuel refueling property. The other tax provisions expiring in 2014 are the automatic amortization extension for multiemployer defined benefits plans; the additional funding rules for multiemployer defined pension plans in endangered or critical status; and the deemed approval of adoption, use, or cessation of shortfall funding method for multiemployer defined benefits plans. The EXPIRE Act would extend the energy-related provisions expiring at the end of 2014 as well as the expiring provisions relating to multiemployer defined benefit pension plans through the end of 2015. As discussed above, the Senate's extenders bill, the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act ( S. 2260 ), would extend most expiring provisions through 2015. The EXPIRE Act would cost an estimated $84.9 billion over the 2014 through 2024 budget window. Of this cost, $87.4 billion is for the two-year extension of tax provisions that expired in 2013. Extending tax provisions that expire in 2014 would cost $0.1 billion. Other revenue provisions would raise $3.4 billion, while the Hire More Heroes Act of 2014 ( H.R. 3474 ) would cost $0.7 billion. The House has taken a different approach to tax extenders, instead considering legislation that would make permanent certain expired provisions (see Table 3 ). The House has passed legislation that would make nine of the expired provisions listed in Table 2 permanent. Taken together, permanently extending these nine provisions would reduce revenues by an estimated $511.4 billion over the 10-year budget window. Six of these nine provisions were included in the Jobs for America Act ( H.R. 4 ). Three other charitable-related provisions were passed as part of the America Gives More Act of 2014 ( H.R. 4719 ). The Committee on Ways and Means has reported legislation that would make two additional international-related extender provisions permanent, although this legislation has yet to be considered by the full House. Some of the legislation proposed in the House would not only extend expired provisions, but would also make policy changes. For example, the House-passed modification and permanent extension of the research credit ( H.R. 4429 and H.R. 4 ) would provide a permanent credit equal to 20% of a taxpayer's qualified research expenditures (QREs) in the current tax year above 50% of average annual QREs in the previous three tax years, 20% of its basic research payments in the current tax year above 50% of average annual basic research payments in the three previous tax years, and 20% of the amounts paid or incurred by the taxpayer in the current tax year for qualified energy research conducted by an energy research consortium. The House-passed proposals to make the increased expensing allowances permanent under Section 179 would index the limits for inflation, starting in 2015. The House-passed proposals to permanently extend 50% bonus depreciation would expand the list of eligible property to include qualified leasehold and retail improvement property, in addition to other changes. The American Taxpayer Relief Act (ATRA; P.L. 112-240 ) extended dozens of temporary tax provisions that had expired or were scheduled to expire at the end of 2012 (see Table 4 ). Many of these provisions were extended retroactively, as they had been allowed to expire at the end of 2011. The 10-year budgetary cost of extending temporary expiring provisions under ATRA was an estimated $73.6 billion. The largest of these provisions, in terms of revenue cost, were the credit for research and experimentation expenses ($14.3 billion), the extension and modification of the wind production tax credit (PTC) ($12.2 billion), and the exception under Subpart F for active financing income ($11.2 billion). Information on the cost of extending specific provisions can be found in Table 4 . Several provisions that might have been considered "traditional extenders"--that is, they had been extended multiple times in the past--were not extended under ATRA. Two charitable provisions, the enhanced deduction for donations of computer equipment, and the enhanced deduction for book inventory to schools, which were first enacted in 1997 and 2005 respectively, were allowed to expire. Other energy-related provisions, including the suspension of the 100%-of-net-income limitation on percentage depletion for oil and gas from marginal wells, first enacted in 1997, and the production tax credit (PTC) for refined coal, first enacted in 2004, were also allowed to expire. Tax incentives for ethanol, which were first enacted in 1978, were also not extended in ATRA, nor were provisions first enacted in 1997 that allowed for expensing of "brownfield" environmental remediation costs. The estate tax look-through rule for regulated investment company (RIC) stock, first enacted in 2004, was also not extended. A number of other provisions were allowed to expire at the end of 2012. Some of these provisions, such as the Section 1603 grants in lieu of tax credits program and 100% bonus depreciation, might have been classified as having been temporary stimulus measures. Among the other provisions that were allowed to expire were a number of disaster relief measures, including Gulf Opportunity (GO) Zone provisions and tax provisions related to the 2008 Midwestern Storms and Hurricane Ike.

Dozens of temporary tax provisions expired at the end of 2013, and several other temporary tax provisions are scheduled to expire at the end of 2014. Most of the provisions that expired at the end of 2013 have been part of past temporary tax extension legislation. Most recently, many temporary tax provisions were extended as part of the American Taxpayer Relief Act (ATRA; P.L. 112-240). Collectively, temporary tax provisions that are regularly extended by Congress--often for one to two years--rather than being allowed to expire as scheduled are often referred to as "tax extenders." The 113th Congress has considered legislation that would extend selected expired or expiring tax provisions. The Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act (S. 2260), which would extend most expired and soon-to-expire tax provisions through 2015, was reported by the Senate Finance Committee on April 28, 2014. The act subsequently became an amendment to H.R. 3474 which did not advance in the Senate, as a motion to end debate on H.R. 3474 was voted down on May 15, 2014. In contrast to the Senate, the House has voted to permanently extend certain expired tax provisions as part of the Jobs for America Act (H.R. 4), which passed the House on September 18, 2014. Several expired charitable-related provisions would be made permanent as part of the America Gives More Act of 2014 (H.R. 4719), which passed the House on July 17, 2014. The President's FY2015 Budget identifies several expiring provisions that should be permanently extended (and in some cases substantially modified), including the research and experimentation (R&D) tax credit, enhanced expensing for small businesses, the renewable energy production tax credit (PTC), and the new markets tax credit (NMTC). Several other expired provisions would be temporarily extended. The President's FY2015 Budget also assumes that the American Opportunity Tax Credit (AOTC), the earned income tax credit (EITC) expansions, and the child tax credit (CTC) expansions, that were extended through 2017 as part of ARTA, are made permanent. There are several reasons why Congress may choose to enact tax provisions on a temporary basis. Enacting provisions on a temporary basis provides legislators with an opportunity to evaluate the effectiveness of tax policies prior to expiration or extension. Temporary tax provisions may also be used to provide temporary economic stimulus or disaster relief. Congress may also choose to enact tax provisions on a temporary rather than permanent basis due to budgetary considerations, as the foregone revenue from a temporary provision will generally be less than if it was permanent. The provisions that expired at the end of 2013 are diverse in purpose, including provisions for individuals, businesses, the charitable sector, energy, community assistance, and disaster relief. Among the individual provisions that expired are deductions for teachers' out-of-pocket expenses, state and local sales taxes, qualified tuition and related expenses, and mortgage insurance premiums. On the business side, under current law, the R&D tax credit, the WOTC, the active financing exceptions under Subpart F, and increased expensing and bonus depreciation allowances will not be available for taxpayers after 2013. Expired charitable provisions include the enhanced deduction for contributions of food inventory and provisions allowing for tax-free distributions from retirement accounts for charitable purposes. The renewable energy production tax credit (PTC) expired at the end of 2013, along with a number of other incentives for energy efficiency and renewable and alternative fuels. The new markets tax credit, a community assistance program, also expired at the end of 2013.

The Defense Department announced on June 24, 2009, that an agreement of "mutual benefit" had been concluded with the Kyrgyz government "to continu[e] to work, with them, to supply our troops in Afghanistan, so that we can help with the overall security situation in the region." According to Kyrgyz Foreign Minister Kadyrbek Sarbayev, the government decided to conclude the annually renewable "intergovernmental agreement with the United States on cooperation and the formation of a transit center at Manas airport," because of growing alarm about "the worrying situation in Afghanistan and Pakistan." The agreement permits the transit of personnel and non-lethal cargoes, although Kyrgyzstan is not permitted to inspect the cargoes, he stated. A yearly rent payment for use of land and facilities at the Manas airport would be increased from $17.4 million to $60 million per year and the United States had pledged more than $36 million for infrastructure improvements and $30 million for air traffic control system upgrades for the airport. Sarbayev also stated that the United States had pledged $20 million dollars for economic development, $21 million for counter-narcotics efforts, and $10 million for counter-terrorism efforts. All except the increased rent have already been appropriated or requested (see below, Congressional Concerns ). The agreement also reportedly includes stricter host-country conditions on U.S. military personnel. One Kyrgyz legislator claimed that the agreement was not a volte - face for Kyrgyzstan because Russia and other Central Asian states had signed agreements with NATO to permit the transit of supplies to Afghanistan. Prior to the signing of the new agreement on June 22, 2009, President Obama reportedly had sent a letter to Kyrgyz President Bakiyev that stated that a high level delegation was ready to travel to Kyrgyzstan to discuss the status of the airbase and enhanced cooperation between the two countries. In mid-June, Afghan President Hamed Karzai met Bakiyev at a conference in Moscow and reportedly urged him to keep the airbase open. In February 2009, Kyrgyzstan announced that it was terminating an agreement permitting U.S. forces to use portions of the Manas International Airport and adjoining areas near the capital of Bishkek to support coalition military operations in Afghanistan. According to the U.S. Air Force, the airbase provides major refueling and air mobility capabilities in support of operations in Afghanistan. U.S. forces faced leaving the airbase by late August 2009. Major U.S. concerns raised by the Kyrgyz announcement included working out alternative logistics routes and support functions for the Obama Administration's planned surge in U.S. troops deployed to Afghanistan and possibly cooler security ties with Kyrgyzstan that would set back U.S. counter-terrorism efforts and other U.S. interests in Central Asia. U.S. and NATO relations with Russia also might have suffered if the airbase closure and other Russian actions in Central Asia came to be viewed as non-supportive of International Security Assistance Force (ISAF) operations in Afghanistan. The United States intensified talks with Kyrgyzstan after the announcement with the goal of persuading the country to reverse its decision. The 111 th Congress was faced with issues associated with either raising security and foreign assistance appropriations for Kyrgyzstan if the airbase remained open, or with re-evaluating U.S.-Kyrgyz relations if the airbase was closed. After the September 11, 2001, terrorist attacks, the United States negotiated status of forces agreements (SOFA) and other security accords with several Central Asian states in order to use their airstrips for what became the U.S.-led Operation Enduring Freedom (OEF) in Afghanistan. The SOFA with Kyrgyzstan was finalized and an airbase was opened at the Manas International Airport (north of the capital of Bishkek) on December 11, 2001. Subsequently, several coalition countries also signed agreements with Kyrgyzstan and deployed troops and aircraft. U.S. military engineers upgraded runways and built an encampment next to the airport, unofficially naming it the Peter J. Ganci airbase, in honor of a U.S. fireman killed in New York on September 11, 2001. By mid-2002, the Manas airbase hosted over 2,000 troops from nine countries. In 2003, Kyrgyzstan agreed to also host a small Russian airbase at Kant, east of Bishkek, ostensibly as part of the Collective Security Treaty Organization (CSTO; members include Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan). The Kant airbase is close to the Manas airbase. On July 5, 2005, the presidents of Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Russia, and China signed a declaration at a summit of the Shanghai Cooperation Organization (SCO; a regional economic and security grouping) that called on OEF coalition members to decide when they would end their use of airbases and other facilities in Central Asia. Later that month, Uzbekistan announced that it was ending a basing agreement with the United States, after the United States had criticized the Uzbek government for repressive actions against civilians. Some of the functions of this airbase were moved to Manas. In October 2005, Kyrgyz President Kurmanbek Bakiyev demanded either that the United States greatly increase fees paid for use of the Manas airbase or close it. After protracted negotiations, agreement was reached in July 2006 on an increase from $2 million per year for leasing the base to $17.4 million for a five-year period. In a joint statement, the United States pledged to provide various forms of assistance to Kyrgyzstan totaling $150 million over the next year, pending Congressional approval. U.S. assistance totaling $150 million was provided to Kyrgyzstan in FY2007, according to the State Department. There is controversy, however, over whether a similar amount was to be provided in subsequent years. During a January 2009 visit to Kyrgyzstan, Gen. David Petraeus, Commander of U.S. Central Command, stated that "the United States provides, both direct and indirect, [aid that] adds up to about $150 million per year in various programs." He also announced "our desire to increase the benefits that accrue to your country from Manas and the other activities." According to a recent factsheet from the U.S. Air Force, the Manas airbase contributed more than $64 million to the local Kyrgyz economy in FY2008. Of this amount, $17.4 million was a lease payment, $22.5 was for airport operations and other land lease fees, nearly $500,000 for upgrading Kyrgyz air control systems, and about $24 million on local contracts and charity work. Besides the $64 million, U.S. foreign operations appropriations for Kyrgyzstan for FY2008 were an estimated $32.6 million, resulting in total assistance of about $96 million. The U.S. Air Force stated in February 2009 that "Manas airbase currently serves as the premier air mobility hub for the International Security Assistance Force and coalition military forces operating in Afghanistan.... Currently, 1,000 personnel from Spain, France and the United States are assigned to the base, along with 650 U.S. and host-nation contractor personnel." It reported that in 2008, the 376th Air Expeditionary Wing based at the Manas airbase flew 3,294 refueling missions over Afghanistan, about 20% of all such missions flown in the theater. The Air Force also reported that most NATO and coalition troops entering or leaving Afghanistan transit through Manas, more than 170,000 in 2008. The airbase is an important landing strip for C-17 Globemaster transports to off-load supplies bound for Bagram airbase in Afghanistan, although the total weight of such cargoes is much less than provided to forces in Afghanistan via other air or land routes. Under the SOFA, the airbase has a significant capability to serve as a possible alternative route for lethal supplies entering Afghanistan if needed. C-17 Globemasters assigned to the airbase are used for rapid airlift of troops and cargoes as well as emergency medical evacuation and airdrops. The 376th Air Expeditionary Wing's KC-135 Stratotankers carry out refueling missions over Afghanistan, and also serve as communications hubs while loitering. The Spanish detachment and their C-130 aircraft provide airlift for medical evacuations and other coalition support. The French detachment provides aerial refueling for coalition aircraft with the French version of the KC-135, the C135FR. While Russia joined other SCO members in the mid-2005 call for a decision on closing coalition bases, the Russian government appeared to intensify its efforts to convince Kyrgyzstan to close the Manas airbase a few months after the United States and Kyrgyzstan had agreed on expanded rent payments. Russian and pro-Russian Kyrgyz media appeared increasingly to allege that airbase operations contributed to environmental damage by polluting the air and soil and that U.S. personnel were a threat to the safety of civilians and were involved in illicit activities (see also below). At the same time, Russian media praised the benefits of Russia's Kant airbase. Among other leverage, the pro-Moscow Party of Communists of Kyrgyzstan was prominent in anti-American demonstrations. A new Russian law on migrant workers went into effect at the beginning of 2007, leading to concerns in Kyrgyzstan, a major source of migrant workers in Russia. Kyrgyz legislative speaker Marat Sultanov visited Russia in May 2007 and reportedly urged Moscow to facilitate the inflow of Kyrgyz migrant workers, including by granting them dual citizenship, in exchange for agreeing to a major boost in the Russian military presence in Kyrgyzstan and to close the Manas airbase. In August 2007, Russia's then-President Vladimir Putin offered to invest up to $2 billion in Kyrgyzstan's economy if "good projects" could be located. The two governments worked on identifying such projects, particularly investments in hydro-electricity production. Inter-governmental accords reportedly were being prepared for signing in late 2008, and talks had expanded to include a $300 million loan to support Kyrgyzstan's budget in the face of the global economic downturn. Around this time, some Kyrgyz and Russian media alleged that Kyrgyz President Bakiyev had acquiesced to a Russian condition that the assistance would be provided if the Manas airbase was closed, and that Bakiyev would announce the base closure when he visited Moscow in early 2009. Most Russian and Kyrgyz officials have denied that the aid was explicitly conditioned on the airbase closure. On February 3, 2009, President Bakiyev announced during his Moscow meeting with Russian President Dmitriy Medvedev that the Manas airbase would be closed. Reasons for closing the base, Bakiyev claimed, included inadequate U.S. compensation for its continued use and strong Kyrgyz public opinion against its continued operation. He also asserted that counter-terrorism operations in Afghanistan had been concluded, which had been the main reason for keeping the airbase open. At their meeting, Medvedev announced that $1.7 billion would be invested in Kyrgyzstan for building a dam and hydroelectric power station and another $450 million would be provided for budget stabilization. Russia also agreed to cancel a $180 million debt owed by Kyrgyzstan in exchange for some properties. The next day, Medvedev suggested that the member-countries of the Russia-led CSTO could compensate for the airbase closure by offering land transit for non-lethal supplies for NATO forces in Afghanistan. The Kyrgyz legislature, dominated by the president's Ak Zhol Party, voted overwhelmingly on February 19, 2009, to close the airbase, and the president signed the bill into law the next day. Under the SOFA, the United States is to turn over the airbase facilities within six months of notification, or by late August 2009. On April 2, 2009, Bakiyev signed similar legislation annulling airbase access agreements with Australia, Denmark, France, Italy, Netherlands, New Zealand, Norway, Poland, South Korea, Spain, and Turkey. Among the few legislators who opposed closing the airbase, Bakyt Beshimov, the leader of the opposition Social Democratic Party, argued that "both the Manas Airbase and the Russian base at Kant ... were opened with the aim of countering terrorism and religious extremism.... Guided exclusively by the national interests of Kyrgyzstan, [we] believe that the decision on the closure of the US airbase is premature." Outside the legislature, prominent human rights advocate Topchubek Turgunaliyev similarly criticized the decision to close the airbase, warning that "our relations will get worse not only with the United States, but with many Western countries." He and some other Kyrgyz citizens argued that by hosting both the U.S. airbase and the Russian Kant airbase, Kyrgyzstan maintained a balanced foreign policy, and that if one airbase was closed, the other also should be closed. Many observers warned that the closure of the Manas airbase might well set back Kyrgyzstan's security relations with the United States and increase Bishkek's dependence on such ties with Russia and China. Seeming to indicate such a tightening security grip, Russia's CSTO head, Nikolay Bordyuzho, announced on April 20, 2009, that "the Russian government plans to enlarge the number of warplanes stationed in Kant. That would correspond to the current situation in Central Asia and Afghanistan." He also stated that the upgraded airbase would support the CSTO rapid reaction forces. Railroad repair work was reported at Kant in February 2009, presumably in advance of a major influx of weaponry and personnel. Some observers maintained that Russia's push for closing the Manas airbase was aimed more to minimize U.S. influence in Central Asia rather than to harm U.S. and ISAF operations in Afghanistan. With President Obama's commitment to increase the size of the U.S. military footprint in Afghanistan, these observers argued, Russia became more concerned that the Manas airbase would become a permanent U.S. presence in the region and would remain even if Afghanistan became more stable. These observers pointed to Russia's readiness to facilitate cargo shipments to Afghanistan and other offers of assistance as indications that Russia supported ongoing U.S. and ISAF operations in Afghanistan. Other observers took a less sanguine view and argued that Russia desired control over access routes in order to gain substantial influence over U.S. and ISAF operations in Afghanistan. They also pointed out that the alternative access proffered by Russia was only for non-lethal shipments and could be restricted or rescinded at any time (see also below). The Russian head of the CSTO, Nicholas Bordyuzho, in late April 2009 reportedly downplayed the significance of the Manas airbase in supporting operations in Afghanistan and instead claimed that by granting transit rights for NATO supplies, Russia and the Central Asian countries had rendered the airbase moot. He also asserted that CSTO efforts were more significant in ensuring stability in Afghanistan and Central Asia and announced that Russia would send more warplanes to the Kant airbase. Also in April 2009, the SCO held a military exercise in Tajikistan to simulate the repulsion of a terrorist incursion from Afghanistan. Disagreeing with such views, Pierre Morel, the EU's Special Representative for Georgia and Central Asia, reportedly emphasized during a visit to Kyrgyzstan that the country would suffer the effects of a deteriorating security situation in Afghanistan if NATO operations there were hindered. He also rejected the view that the airbase closure would not affect EU ties with Kyrgyzstan, since EU citizens were among those fighting in Afghanistan. A presidential election is to be held in Kyrgyzstan in July 2009. Some observers suggested that President Bakiyev faced rising public discontent from the shocks of the global economic downturn, which have led many Kyrgyz migrant workers to return home. Energy shortages during the past two winters also have heightened discontent. To gain electoral support, these observers suggest, Bakiyev raised criticism of the airbase and ordered its closure. Some pro-Moscow opposition parties hailed Bakiyev's decision to close the base, but other parties and groups in Kyrgyzstan raised concerns that Bakiyev's "embrace of Russia" could herald rising Russian-style authoritarianism in Kyrgyzstan. In the end, however, Bakiyev reversed his decision on closing the airbase, perhaps viewing the economic boost provided by keeping the airbase open--at higher rent payments he had negotiated--as enhancing his ability to retain office. At a campaign stop in a small town in southwestern Kyrgyzstan on June 29, Bakiyev stated that "the transit center [the Manas airbase] is the Kyrgyzstan's contribution to ensuring regional security." He reportedly stressed that the situation in Afghanistan and Pakistan was worsening and had at least indirectly influenced Kyrgystan, where a terrorist attack had recently taken place. He also reportedly stated that Presidents Obama and Karzai had urged him to continue to support NATO operations in Afghanistan. After signing cooperative security agreements with the Central Asian states, the former Bush Administration averred that the United States was not seeking "permanent" bases in the region. However, the previous Administration also argued that regional access would "be needed as long as conditions in Afghanistan require it," as well as "for future contingencies and to be involved in training and joint exercises ... for the long term." The Obama Administration has reaffirmed these U.S. interests in the region. On April 24, 2009, then-Assistant Secretary Boucher stressed while visiting Tajikistan the economic and security roles the Central Asian region could play in bolstering stability in Afghanistan. He stated that "President Obama and Secretary Clinton want to continue and expand [the U.S.] involvement in relations with Central Asia. We want to work more closely with the countries in this region. Together we can help bring stability to Afghanistan, and together we can try to open up new opportunities for the nations and especially the people of this region." Some unfortunate incidents at the Manas airbase over the years appeared to increase negative views of the airbase among the population. As mentioned above, such incidents were widely criticized in Russian and Russian-influenced Kyrgyz media and among pro-Moscow parties and groups, were used as weapons in political infighting, and played a role in Kyrgyz government demands for added lease payments. A major sore point in U.S.-Kyrgyz relations occurred after the shooting of an ethnic Russian truck driver by a U.S. serviceman at the Manas airbase in December 2006. Appearing to reflect the influence of Russian-orchestrated propaganda as well as other influences, a Kyrgyz opinion survey in late 2008 reported that 84% of respondents viewed Russia as friendly to Kyrgyzstan and almost 50% viewed the U.S. airbase at Manas negatively as a symbol of U.S. aspirations for global domination. According to some observers, the U.S. military did not appear overly concerned about the status of the Manas airbase as late as October 2008, when the Army Corps of Engineers invited bids for construction of a concrete parking ramp to support strategic and refueling operations and a concrete hazardous cargo pad. However, by the time of the visit of Gen. David Petraeus in January 2009, such concerns appeared evident by his offer to consider boosting U.S. assistance. Responding to Bakiyev's announcement that the Manas airbase would be closed, U.S. Defense Secretary Robert Gates stated that "Manas is important, but it's not irreplaceable.... We have not resigned ourselves to this being the last, the last word.... I think we are prepared to look at the fees and see if there is justification for a somewhat larger payment.... We are prepared to do something that we think is reasonable.... It is an important base, but it's not so important that we're going to waste taxpayer dollars paying something that's exorbitant." Then-Assistant Secretary Boucher indicated on April 24 that talks with Kyrgyzstan are ongoing, and that in the meantime, operations have not been affected at the airbase. He also emphasized that the United States was not "in particular" seeking another airbase in Central Asia, and that the functions carried out at the Manas airbase might be parceled out to various locations rather than to one new airbase. Many observers raised concern that the Manas airbase closure could complicate President Obama's February 17, 2009, order for up to 17,000 additional troops to be deployed to Afghanistan by the end of the year. Over its lifetime, the Manas airbase has been the premier point of access to and from Afghanistan for most U.S. military and contract personnel. Although the airbase is currently not used to transport lethal cargoes into Afghanistan (lethal cargoes do exit Afghanistan through the airbase), its SOFA permits it to be used as an alternative secure way-station for the supply of lethal military supplies to Afghanistan. It may be difficult to find similarly convenient facilities for aerial refueling, data communications, and medical evacuation. Retired Gen. Richard Myers, the former chairman of the U.S. Joint Chiefs of Staff, has warned that the closure of the Manas airbase could make maintaining the supply routes to Afghanistan more difficult and expensive. He has suggested that bases in Turkey or elsewhere in the Middle East could be used for refueling missions, but operational costs would be higher. Some observers suggested that Russia was using the putative closure of the Manas airbase as a bargaining chip to force U.S. concessions on missile defense, NATO enlargement, and other issues. Analyst Stephen Blank argued that such a Russian strategy would prove fruitless because the United States would not recognize Russia's claims to a sphere of exclusive influence in Central Asia. He argued that Russia's apparent success in convincing Kyrgyzstan to close the Manas airbase demonstrated that the United States should provide more assistance to the Central Asian states so that they have "the ability to make their own unfettered decisions on security matters.... Washington must be prepared to invest heavily in Central Asian states." Analysts such as Blank and others also raised concerns that a possible reduction of U.S. influence in Central Asia could jeopardize the security of alternative land supply routes to Afghanistan. The need for such routes increased as a result of Taliban attacks on non-lethal U.S. and NATO shipments through Pakistan to Afghanistan. Recent agreements reached with Russia and Central Asian states permit overland transit of non-lethal and non-sensitive cargoes to Afghanistan. Land routes include one starting at the Latvian port of Riga and continuing by rail through Russia, Kazakhstan, and Uzbekistan. Another route starts at the Georgian port of Poti, crosses the Caspian by ferry, and commences by rail through Kazakhstan and Uzbekistan. Goods also can enter Tajikistan from Uzbekistan and be delivered by truck across a U.S.-built bridge to Afghanistan. According to some reports, U.S. planners calculate that about 20% of non-lethal supplies to Afghanistan could be sent along these routes (with much of the remainder continuing to be sent via Pakistan). The first shipment of U.S. non-lethal military supplies--reportedly including camouflage, food, and civil engineering equipment--was loaded onto rail cars at the port of Riga, Latvia, and transited the Baltic states, Russia, Kazakhstan, and Uzbekistan to arrive in Afghanistan in late March 2009. Some analysts point out that U.S.-led coalition actions in Afghanistan in 2001-2002 seriously degraded the capabilities of the Islamic Movement of Uzbekistan (IMU) and other terrorist groups harbored in Afghanistan that had periodically launched attacks in Central Asia. Russia and China, in contrast, had appeared unwilling, if not unable, to provide enough military support to Central Asia in the 1990s to halt these periodic attacks. These analysts question whether Russia and China would now prove able to provide enough military support to prevent the re-emergence of such attacks. Analysts Borut Grgic and Alexandros Petersen raise a related concern that terrorists could seek safe harbors in an insecure Central Asia and launch attacks into Afghanistan. They state that "weak borders between Central Asia and Afghanistan are a recipe for long-term failure for the United States and its NATO allies in Afghanistan. We see today how terrorists and other criminals move unbothered through the porous border with Pakistan. Why should it be any different on the Central Asian side?" Congress has supported the maintenance of the U.S. airbase at Manas by providing construction and other military assistance as well as enhanced U.S. foreign assistance. This Congressional support also has been prompted, in part, by some democratization progress in the country, although these reforms recently have appeared to lag. Similar to the case in 2006--when the United States and Kyrgyzstan agreed on a revised rental agreement--current talks on keeping the airbase open, if successful, could result in an Administration request to Congress to approve added funding or other legislative action. For some Members, the issue at this time may include whether the advantages of keeping the airbase open outweigh Kyrgyzstan's apparently declining democratization progress. Among recent legislative action, Division E of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act for FY2009 ( H.R. 2638 ; P.L. 110-329 ) provided $6 million for constructing a hazardous cargo pad at the Manas airbase. Construction was originally planned to begin on April 9, 2009. The Consolidated Appropriations Act, 2008 ( H.R. 2764 ; P.L. 110-161 ) provided $30.3 million for construction of a parking ramp at the airbase. Perhaps of some significance to possibly re-aligning some functions carried out at the Manas airbase, a parking ramp for wide-body strategic airlift is being built at Bagram airbase in Afghanistan. Strategic airlift currently must land at Manas and offload cargo for airlifting to Bagram, where cargo is again reloaded for airlift to forward operations bases. At a hearing of the Senate Armed Services Committee in mid-March 2009, Senator John McCain raised concerns about the impact the possible closure of the Manas airbase would have on transportation and logistics risks associated with the shift of resources and personnel from Iraq to Afghanistan. At a hearing in late April 2009 on the President's request for supplemental appropriations for FY2009, Representative Chet Edwards asked about whether a new $30 million request for air traffic control system upgrades at the Manas airbase was still warranted in light of Kyrgyzstan's demand for the closure of the airbase. He also noted that the previously appropriated $36 million (the $30.3 million ramp and the $6 million pad mentioned above) had not yet been expended, and encouraged ongoing U.S.-Kyrgyz talks to keep the airbase open. Gen. David Petraeus, Commander of U.S. Central Command, responded that "if, of course, it came that we were to leave [the Manas airbase], obviously we would not invest in that particular air traffic control improvement. I don't want to get ahead of things, but we need to give this time.... it's our hope that actually all parties in the region, and this includes Russia, could [join in] a broad partnership against transnational extremism and the illegal narcotics activities." Supplemental appropriations for FY2009 (signed into law on June 24, 2009; P.L. 111-32 ) provided $30 million for air traffic control system upgrades at the Manas airbase and $21.52 million for drug interdiction and counter-drug activities in Kyrgyzstan. The Obama Administration's FY2010 foreign assistance request calls for boosting aid for Kyrgyzstan from $29.06 million in FY2009 to $48.23 million in FY2010. The added request "represents a strategic shift to focus on programs that will stabilize and reform the Kyrgyz economy during turbulent times." The boost also reflects added foreign military financing (FMF), from $800,000 for FY2009 to a requested $2.9 million for FY2010.

In February 2009, Kyrgyzstan announced that it was terminating an agreement permitting U.S. forces to upgrade and use portions of the Manas international airport near the capital of Bishkek to support coalition military operations in Afghanistan. U.S. forces faced leaving the airbase by late August 2009. Major U.S. concerns included working out alternative logistics routes and support functions for a surge in U.S. and NATO operations in Afghanistan and possibly cooler security ties with Kyrgyzstan that could set back U.S. counter-terrorism efforts and other U.S. interests in Central Asia. After reportedly intense negotiations, the United States and Kyrgyzstan reached agreement in June 2009 on modalities for maintaining U.S. and NATO transit operations at Manas. For more on Central Asia, see CRS Report RL33458, Central Asia: Regional Developments and Implications for U.S. Interests, by [author name scrubbed].

Early in December 2010, press reports indicated that legislators, especially in the Senate, were seeking to gather support for several water quality bills that could be considered during the post-election, lame duck session of the 111 th Congress, possibly packaged with others dealing with public lands and wildlife protection. These discussions resulted in a comprehensive bill, titled "America's Great Outdoors Act of 2010," that was introduced in the Senate on December 17 ( S.Amdt. 4845 to S. 303 ). The water quality measures were found in Division J, Title CII (Subtitles A-I) and Title CII (Subtitle A) of S.Amdt. 4845 . This report describes water quality bills that were included in the package. All but one of the bills discussed below would have amended the Clean Water Act (CWA, 33 U.S.C. 1251 et seq.), and all had been approved and reported by the Senate Environment and Public Works Committee. Similar House bills had been introduced for all but one of the Senate measures, and the House had passed two of them. With the exception of legislation that focused on Chesapeake Bay ( S. 1816 , discussed below), the individual bills were not considered to be controversial, although some Members criticized the expansive scope and cost of the entire omnibus bill. Most of the individual bills would either have reauthorized and in some cases modified existing CWA provisions that address water quality concerns in specified geographic areas, or they would have established similar provisions for other regions or watersheds. As included in S.Amdt. 4845 , most of the bills were little changed from the Senate Environment Committee-approved versions, while three reflected more substantive modifications (bills dealing with the Great Lakes, Long Island Sound, and San Francisco Bay). The 111 th Congress adjourned sine die on December 22 without taking up either the omnibus bill or individual measures that were included in S.Amdt. 4845 . Whether the 112 th Congress will consider some or all of these bills is unknown for now. The CWA is the principal federal law that deals with polluting activity in the nation's surface streams, lakes, estuaries, and coastal waters. Enacted basically in its current form in 1972 (P.L. 92-500), the law established broad water quality restoration objectives for the nation's waters. The objectives were accompanied by statutory goals to eliminate the discharge of pollutants into navigable waters of the United States by 1985 and to attain, wherever possible, waters deemed "fishable and swimmable" by 1983. Programs at the federal level are administered by the U.S. Environmental Protection Agency (EPA); state and local governments have major day-to-day responsibilities to implement CWA programs through standard-setting, permitting, and enforcement. Considerable progress towards the goals of the act has been made, but long-standing problems persist and new problems have emerged. The last major amendments to the law were the Water Quality Act of 1987 ( P.L. 100-4 ), the most comprehensive amendments since 1972. Subsequently, congressional committees conducted oversight on the law, and Congress enacted bills addressing a number of regional water quality concerns. The 111 th Congress bills included in American's Great Outdoors Act of 2010 ( S.Amdt. 4845 ) addressed issues for these geographic-specific areas and CWA programs: Estuaries under the CWA's National Estuary Program, Chesapeake Bay, Columbia River Basin, Great Lakes, Gulf of Mexico, Lake Tahoe, Long Island Sound, Puget Sound, San Francisco Bay, and Monitoring water quality of coastal recreation waters. Estuaries are areas where rivers meet the sea and where fresh and salt water mix. They are critical to the health of coastal environments. They serve as important habitat for fish and wildlife, provide wetland plants and soils that trap pollutants and temper storm surges, and provide tangible, direct economic benefits to regions and the nation. Many, however, are threatened or degraded by overuse of resources and human development. In response to concerns about conditions of the nation's coastal estuaries, the 1987 CWA amendments established the National Estuary Program (NEP) in Section 320 of the act. The NEP is a program to promote comprehensive planning efforts to protect nationally significant estuaries that are threatened by pollution, development, and overuse. Once approved by EPA, local stakeholders can receive financial and technical assistance to develop and implement a comprehensive conservation management plan that addresses factors that contribute to the estuary's degradation. To date, EPA has approved 28 estuaries for participation in the program. Since 1987, Congress has amended Section 320 to reauthorize funding and in several cases to identify estuaries to be given priority consideration under the program. Authorization of Section 320 appropriations expired at the end of FY2010. In April 2010, the House passed H.R. 4715 , the Clean Estuaries Act, to reauthorize assistance through FY2016 and to increase the authorization from $35 million annually to $50 million annually to encourage EPA to expand the number of estuaries included in the program. Further, H.R. 4715 would have added several requirements in the development of comprehensive management plans, such as addressing the impacts of climate change, and would have required periodic update of the plan and evaluation and approval by EPA. Under the House-passed bill, if the EPA review were to find the plan deficient, EPA could reduce grant funding until the plan was revised. The Senate Environment and Public Works Committee approved an amended version of H.R. 4715 in June ( S.Rept. 111-293 ). As reported, the bill would have increased authorization of appropriations to $75 million per year and would have required updates and evaluations every five years, rather than every four years as in the House-passed version. In S.Amdt. 4845 , National Estuary Program provisions were included in Division J, Title CII, Subtitle C. The provisions were essentially the same as in the bill as approved by the Senate Environment and Public Works Committee. Modifications were included to clarify EPA procedures for reviewing and determining completeness of a comprehensive management plan. The provisions of S.Amdt. 4845 would have authorized appropriations of assistance for NEP estuaries for six years (through FY2017) at $75 million per year. The bill with the greatest potential for controversy is S. 1816 , the Chesapeake Clean Water and Ecosystem Restoration Act of 2009. It would revise CWA Section 117, which addresses restoration of Chesapeake Bay's water quality. Because of this stand-alone CWA provision, Chesapeake Bay is not included in the NEP. Despite several decades' of activity by governments, the private sector, and the general public, efforts to improve and protect the Chesapeake Bay watershed have been insufficient to meet restoration goals. Although some specific indicators of bay health have improved slightly or remained steady (such as blue crabs and underwater bay grasses), others remain at low levels of improvement, especially water quality. Overall, the bay and its tributaries remain in poor health, with polluted water, reduced populations of fish and shellfish, and degraded habitat and resources. In May 2009, President Obama issued Executive Order 13508 that declared the bay a "national treasure" and charged the federal government with assuming a strong leadership role in restoring the bay. The executive order established a Federal Leadership Committee for the Chesapeake Bay to develop and implement a new strategy for protecting and restoring the Chesapeake Basin that would build on and accelerate existing programs like those under CWA Section 117. A central feature of the overall strategy is EPA's pledge to establish a Total Maximum Daily Load (TMDL) for Chesapeake Bay. Section 303 of the CWA requires states to identify waters that are impaired by pollution, even after application of pollution controls. For those waters, states must establish a TMDL to ensure that water quality standards can be attained. A TMDL is essentially a pollution budget, or a quantitative estimate of what it takes to achieve standards, setting the maximum amount of pollution that a water body can receive without violating standards. If a state fails to do this, EPA is required to make its own TMDL determination for the state. Throughout the United States--including the Chesapeake Bay watershed--more than 20,000 waterways are known to be violating applicable water quality standards, and thus requiring development of a TMDL. Lawsuits have been brought to pressure EPA and states to develop TMDLs; under a consent decree in one such lawsuit, EPA must establish a Chesapeake Bay TMDL by no later than May 1, 2011, with a goal of having TMDL implementation measures in place by 2025. The Chesapeake Bay TMDL will be the geographically largest single TMDL developed to date. It will address all segments of the bay and its tidal tributaries that are impaired from discharges of nitrogen, phosphorus, and sediment, and the TMDL will allocate needed reductions of these pollutants to all jurisdictions in the 64,000-square-mile watershed. Detailed plans identifying specific reductions will be developed by the bay states in Watershed Implementation Plans. Environmental activists are pleased that the federal government is now asserting a leadership role to restore the bay and are supporting legislation that would codify procedural requirements and deadlines for the bay TMDL and authorize grants and other assistance for implementing required measures. S. 1816 proposed to do so. As reported, the bill generally sought to codify 2025 as a deadline for implementing restoration actions throughout the Chesapeake Basin and would have given EPA explicit backup authority to develop measures to restore the watershed, if states fail to do so. The legislation would have authorized significant financial resources, totaling $2.26 billion over six years, to assist in implementing programs, projects, and measures for restoration of the Chesapeake Basin watershed. The legislation was controversial--as are EPA's TMDL plans and the overall federal Chesapeake Bay restoration strategy--and a number of groups such as agriculture and developers have been concerned about the likely mandatory nature of many of EPA's and states' upcoming actions that will occur with or without the authorization of appropriations in the legislation. The Senate Environment and Public Works Committee approved S. 1816 on June 30 ( S.Rept. 111-333 ). In the House, companion legislation was introduced ( H.R. 3852 ), as were several other bills concerned with Chesapeake Bay issues ( H.R. 5509 , H.R. 3265 , and H.R. 6382 ). The House Agriculture Committee approved an amended version of H.R. 5509 in July (no report was filed); there was no legislative action on the other House bills. In S.Amdt. 4845 , Chesapeake Bay provisions were included in Division J, Title CII, Subtitle H. The provisions were generally the same as the Chesapeake Bay bill approved by the Senate Environment and Public Works Committee, but did include some modifications that were based in part on separate legislation, H.R. 5509 . In particular, revisions included the following: directing EPA to establish a website providing transparency on Chesapeake Bay restoration efforts, calling for EPA to prepare annually a financial report and interagency crosscut budget accounting for federal funding on Bay restoration, and modifying provisions related to compliance of agricultural or private forest conservation plans with state management plans for Bay restoration. Finally, the provisions of S.Amdt. 4845 included language that would amend the Food Security Act of 1985 (the farm bill) authorizing the Secretary of Agriculture to identify conservation practices for agricultural and private foresters that Chesapeake Bay states could use in their restoration implementation plans. The lower Columbia River estuary is one of 28 estuaries included in the National Estuary Program. S. 4016 , the Columbia River Basin Restoration Act of 2010, would have added a new section to the CWA to establish a restoration program for the whole of the Columbia River Basin in the Pacific Northwest (the lower, middle, and upper portions, including the Snake, Clark Fork, and Pend Oreille Rivers and tributaries) and direct EPA to provide federal leadership and coordination. A particular focus of restoration efforts would be reducing toxic contamination throughout the basin. The legislation included a provision, unrelated to CWA Section 320, directing the President to preserve and protect the transboundary Flathead River watershed that spans the United States and Canada, including participation in cross-border collaborations. S. 4016 would have authorized grants to carry out plans or projects under the legislation, authorizing appropriations of $33 million annually from FY2012 through FY2017. Under the legislation, the federal share of project costs would not exceed 75%. S. 4016 was an original bill that was introduced on December 8 and reported from the Senate Environment and Public Works Committee that same day ( S.Rept. 111-358 ). There was no action in the House on similar legislation ( H.R. 4652 , which did not include a provision on the Flathead River watershed). In S.Amdt. 4845 , Columbia River Basin provisions were included in Division J, Title CII, Subtitle E. These provisions were generally the same as provisions of the Environment Committee bill, S. 4016 . The ecosystem of the Great Lakes, the largest system of surface freshwater in the world, faces threats from multiple stressors, including aquatic invasive species, pollution of the open waters and coastal areas of the lakes, habitat degradation, and sediments that are contaminated with mercury and other pollutants. Efforts by governments, private interests, and the public in both the United States and Canada to address these challenges have been underway for several decades. The 1987 CWA amendments established Section 118 of the CWA and put in place measures to achieve water quality improvement goals embodied in agreements between the United States and Canada. Congress has amended this provision several times since then, adding new authorities and requirements in order to strengthen Great Lakes restoration actions. In particular, in 2002 Congress passed the Great Lakes Legacy Act ( P.L. 107-303 ), which amended CWA Section 118 to authorize funds for projects to remediate toxic, contaminated sediments throughout the lakes. In 2004 President Bush issued Executive Order 13340, which created the Great Lakes Interagency Task Force of federal agencies to coordinate restoration of the lakes. In separate action, a Regional Collaboration of state and local governments, the public, and the private sector subsequently released a strategy and implementation framework for restoration. In the FY2010 budget proposal, President Obama requested increased funding (totaling $475 million) for an EPA-led Great Lakes Restoration Initiative to target federal funding to major threats to the ecosystem of the lakes that have been identified by the Interagency Task Force and the Regional Collaboration. The initiative is essentially a means of coordinating appropriations for Great Lakes restoration. Congress approved the requested FY2010 appropriations. In February 2010, the Interagency Task Force issued a multi-year restoration Action Plan to guide implementation of the Initiative through projects and grants in five areas: toxic substances, invasive species, nonpoint source pollution, habitat and wildlife restoration, and partnerships and communication. In the 111 th Congress, the Senate Environment and Public Works Committee approved two bills concerning Great Lakes issues. First, S. 3073 , the Great Lakes Ecosystem Protection Act of 2010, addressed governance issues. It would have amended CWA Section 118 to establish a Great Lakes Leadership Council to provide input on restoration priorities to the federal Interagency Task Force. It also would have established in law the existing Interagency Task Force, to continue coordination of restoration efforts, and the Great Lakes Restoration Initiative, to target the most significant environmental problems of the ecosystem. The bill would have authorized $475 million annually through FY2016 for the initiative. It also would have reauthorized the Great Lakes Legacy Act program for projects to remediate contaminated sediments at $150 million annually through FY2015. A second Environment Committee-approved bill, the Contaminated Sediment Remediation Reauthorization Act ( S. 933 ), addressed only the existing program for remediation of contaminated sediments in the Great Lakes in CWA Section 118. It also would have reauthorized that program at $150 million annually through FY2014. The Senate Environment and Public Works Committee approved S. 3073 on June 30 ( S.Rept. 111-283 ) and S. 933 on June 19 ( S.Rept. 111-171 ). Similar measures were introduced in the House. H.R. 4755 , like S. 3073 , would have provided statutory authority for the Great Lakes Restoration Initiative and the Great Lakes Interagency Task Force and would have reauthorized the Great Lakes contaminated sediment remediation program. There was no action on this bill. Separate legislation, in Title V of H.R. 1262 , also would have reauthorized the contaminated sediment remediation program with $150 million per year in funding through FY2014. The House passed H.R. 1262 , including Title V, in March 2009. In S.Amdt. 4845 , Great Lakes provisions were included in Division J, Title CII, Subtitle F. These provisions were based on the committee-reported version of S. 3073 but included a number of modifications to that bill. The legislation would have established a Great Lakes Leadership Council, which, together with the existing Great Lakes Interagency Task Force, would be known as the Great Lakes Collaboration Partnership. The Partnership would be responsible for developing a Great Lakes Restoration Blueprint, a strategy for protecting water quality and the ecosystem of the Great Lakes basin. The Leadership Council also would be responsible for developing annual priority lists of projects to advance the goals and objectives of the Blueprint or the Great Lakes Restoration Initiative Action Plan. The legislation would have authorized to be appropriated $475 million per year through FY2017 and authorized EPA to transfer not more than $475 million to other federal agencies to carry out activities under the Blueprint, the Action Plan, or the Great Lakes Water Quality Agreement between Canada and the United States. It would have codified the Great Lakes Interagency Task Force, and it would have established new reporting requirements, as well as preparation of a crosscut budget for Great Lakes funding. Finally, the provisions in S.Amdt. 4845 also included an increase in authorization for the contaminated sediment remediation program, under the Great Lakes Legacy Act, from $50 million to $150 million annually, for FY2012-FY2017. The health of the Gulf of Mexico's economically important and biologically rich ecosystem had been a concern long before the 2010 Deepwater Horizon oil spill in the gulf. In 1988 EPA administratively created a Gulf of Mexico Program to provide federal leadership and identify priority areas and projects for states and gulf coastal communities to undertake on a voluntary basis to protect, maintain, and restore the productivity of the gulf. S. 1311 , the Gulf of Mexico Restoration and Protection Act, would have added a new section to the CWA to establish the program in statute, codify authorities of the EPA Administrator to use interagency agreements to carry out functions of the program office, and authorize grants for monitoring of water quality and living resources, conducting research, developing and implementing restoration projects, and similar purposes. The federal share of project costs would be limited to 75%. The bill would have authorized a total of $100 million for five years, through FY2014. The Senate Environment and Public Works Committee approved S. 1311 on June 30 ( S.Rept. 111-241 ). There was no similar House bill. In S.Amdt. 4845 , Gulf of Mexico provisions were included in Division J, Title CII, Subtitle A. Provisions were generally the same as in S. 1311 , but one modification reduced the five-year authorization of appropriations to $57 million (FY2012-FY2016). Lake Tahoe is the second-deepest lake in North America, and the clarity of its waters and scenery are major tourist and recreational attractions. Since the 1960s, the governments of California and Nevada have engaged in efforts to protect the lake from environmental pressures such as nutrient pollution, fire, and invasive species. In 1969 Congress ratified an agreement between the two states that created a regional planning agency with authority to adopt and enforce environmental quality standards. In 1997 President Clinton issued Executive Order 13057, which created the Lake Tahoe Federal Interagency Partnership to lead a cleanup effort of the lake. In 2000 Congress enacted the Lake Tahoe Restoration Act ( P.L. 106-506 ). It authorized $300 million over 10 years for projects such as land acquisition, forest management, fire suppression, and water quality improvement. This law is not part of the CWA. Several federal agencies, including the Forest Service, the Fish and Wildlife Service (FWS), and EPA, have roles and responsibilities in carrying out its authorities. In the 111 th Congress, S. 2724 , the Lake Tahoe Restoration Act of 2010, would have reauthorized the 2000 legislation. The bill assigned high priority to a number of projects and programs, including watershed restoration, forest management, fire suppression, and invasive species management. It would have directed EPA to establish a Lake Tahoe Basin Program to conduct research, provide scientific and technical support on restoration, and develop performance measures for assessing restoration. It would have authorized appropriation of $415 million through FY2018 for several federal agencies to perform ecological restoration activities in the Lake Tahoe Basin. Of the amount authorized, $136 million would be for Forest Service projects to reduce the risk of fire; $102 million would be for EPA research and grants for certain projects to improve water clarity and manage stormwater runoff; and $41 million would be for FWS activities against invasive species. Remaining unallocated funds would have been available to carry out other restoration projects. The Senate Environment and Public Works Committee approved S. 2724 on June 30 ( S.Rept. 111-211 ). There was no action in the House on related legislation ( H.R. 4001 ). In S.Amdt. 4845 , Lake Tahoe provisions were included in Division J, Title CII, Subtitle B. These provisions were the same as the Environment Committee-approved bill, S. 2724 . Long Island Sound, bordering New York and Connecticut, is one of the 28 estuaries included in the National Estuary Program; it was one of the original estuaries designated for priority when the NEP was established in law in 1987. In 2000, Congress amended the CWA to add Section 119, which established a Long Island Sound Program office providing federal leadership for developing a conservation management plan for Long Island Sound and authorized grants for related projects and activities. In 2006, Congress enacted separate legislation, the Long Island Sound Stewardship Act ( P.L. 109-359 ), which did not amend the CWA but also dealt with Long Island Sound and authorized grants for restoration activities. In the 111 th Congress, S. 3119 , the Long Island Sound Restoration and Stewardship Act of 2010, would have reauthorized grant programs under CWA Section 119 and the Stewardship Act through FY2015 at their current authorized levels: $40 million per year for Section 119 program and $25 million per year for Long Island Sound Stewardship grants. It also would have mandated new reporting and budgeting requirements and established a pilot project for natural filtration technologies to remove nutrients from the Sound. The Senate Environment and Public Works Committee approved S. 3119 on June 30 ( S.Rept. 111-298 ). There was no action in the House on related legislation, H.R. 5876 , which dealt only with the Long Island Sound Program under CWA Section 119. In S.Amdt. 4845 , Long Island Sound provisions were included in Division J, Title CII, Subtitle G. These provisions made substantial changes to the Environment Committee-reported bill. In addition to provisions of the bill as reported, it defined the area covered by CWA Section 119 to be the Long Sound watershed, meaning the Sound and named rivers and tributaries that drain into the Sound, and defined Long Island Sound state to include Connecticut, New York, Massachusetts, New Hampshire, Rhode Island, and Vermont. It would have added new requirements in CWA Section 119 to authorize issuance of stormwater discharge permits on a regional basis and would have required that stormwater discharge permits held by industrial or construction sources within the watershed shall conform to municipal stormwater discharge permits issued under CWA Section 402(p). The provisions in S.Amdt. 4845 also would have directed EPA to work with governors of Long Island Sound states to establish a voluntary interstate nitrogen trading program. Under the legislation, the director of EPA's Long Island Sound Office would be required to prepare annually a list of priority restoration projects. Finally, the legislation would have increased authorization levels as in the reported bill ($40 million per year for Section 119 program and $25 million per year for Long Island Sound Stewardship grants, each for five years) and also would have authorized $1.125 billion over four years for municipal wastewater treatment projects. Puget Sound, a Washington State estuary, is one of 28 estuaries currently included in the NEP. S. 2739 , the Puget Sound Recovery Act of 2010, would have added a new section to the CWA to authorize federal funding expressly to support the protection and restoration of Puget Sound. It would have authorized $90 million annually through FY2015 to EPA to provide funding for projects that are prioritized by the Puget Sound Partnership, a Washington State agency, and approved by EPA in order to implement a comprehensive plan for restoring the estuary. For certain types of activities, the federal share could be 75%; for identified priority projects, the federal share could be 50%. The Senate Environment and Public Works Committee approved S. 2739 on June 30 ( S.Rept. 111-292 ). There was no legislative action in the House on similar legislation ( H.R. 4029 ). In S.Amdt. 4845 , Puget Sound provisions were included in Division J, Title CII, Subtitle D. These provisions were generally the same as the reported bill, but with several modifications. The changes addressed clarifying procedures for EPA's approval of an annual list of priority restoration projects, revising the allocation of funds to implement a comprehensive restoration plan (generally specifying percentages of available funds, but not dollar amounts), and allowing EPA to increase the federal share of certain projects or activities to 100% (e.g., a project carried out solely by a Puget Sound tribe). San Francisco Bay is one of 28 estuaries currently included in the NEP. S. 3539 , the San Francisco Bay Restoration Act, would have added a new section to the CWA to authorize a grant program to fund restoration of San Francisco Bay in accordance with the comprehensive conservation management plan developed through the NEP. According to S.Rept. 111-284 , EPA has received $17 million in appropriations over the last three years to provide grants for ecosystem restoration and water quality work in the San Francisco Bay. The bill would have authorized "such sums as are necessary" annually through FY2020 for grants to undertake estuary restoration projects. Under the legislation, a federal grant would not exceed 75% of the total cost of eligible activities. The Senate Environment and Public Works Committee approved S. 3539 on June 30 ( S.Rept. 111-284 ). There was no legislative action in the House on similar legislation ( H.R. 5061 ). In S.Amdt. 4845 , San Francisco Bay provisions were included in Division J, Title CII, Subtitle I. These provisions made substantial changes to the Environment Committee-reported bill. As modified, the legislation would have directed EPA to prepare annually a list of priority projects to restore the San Francisco Bay estuary and would have authorized EPA to provide funding to the San Francisco Estuary Partnership for identified activities and projects. It would have authorized $350 million over 10 years (FY2012-FY2021) for such assistance, at a 75% federal share. The legislation would have permitted the Estuary Partnership to receive assistance under these provisions, as well as through the NEP (CWA Section 320). In 2000 Congress enacted the Beaches Environmental Assessment and Coastal Health Act (BEACHES Act, P.L. 106-284 ), in order to augment federal and state efforts to prevent human exposure to polluted coastal recreation waters, including the Great Lakes. This act amended to CWA to direct coastal states to adopt updated water quality standards and EPA to develop new protection water quality criteria and standards for coastal recreation waters. It also authorized grants to coastal states to support monitoring and public notification programs. In the 110 th Congress Senate and House committees held hearings on implementation of the BEACH Act, and bills to extend authorization of appropriations for beach monitoring grants were introduced, but none was enacted. The 111 th Congress considered similar bills. In June 2009 the Senate Environment and Public Works Committee approved S. 878 , the Clean Coastal Environment and Public Health Act ( S.Rept. 111-170 ), which would have required the use of more rapid testing of beach waters for contamination and faster notification to the public to warn of contamination. It also would have increased grants to states for beach monitoring and testing, from $30 million annually to $60 million annually, and extended the authorization of appropriations for five years, through FY2013. The House passed similar legislation, H.R. 2093 , in July 2009. In S.Amdt. 4845 , provisions concerning water quality of coastal recreation waters were included in Division J, Title CIII, Subtitle A. The provisions in the amendment were generally the same as in S. 878 (including a five-year authorization of appropriations for grants to states of $60 million per year), but would have extended authorization of appropriations for grants to states through FY2016. The amendment also included three new provisions calling for studies by EPA. One was a study on the long-term impact of pollution on coastal recreation waters, and the second was a study on the impact of excess nutrients and algal blooms on coastal recreation waters. The third study was to address the formula for distributing state grants under the BEACHES program.

Early in December 2010, press reports indicated that legislators, especially in the Senate, were seeking to gather support for several water quality bills that could be considered during the post-election, lame duck session of the 111th Congress, possibly packaged with others dealing with public lands and wildlife protection. These discussions resulted in a comprehensive bill, titled "America's Great Outdoors Act of 2010," that was introduced in the Senate on December 17 (S.Amdt. 4845 to S. 303). This report describes water quality bills that were included in the legislative package. All but one of the bills discussed below would have amended the Clean Water Act (CWA), and all had been approved and reported by the Senate Environment and Public Works Committee. Similar House bills were introduced for all but one of the Senate measures, and the House had passed two of them. With the exception of a bill on Chesapeake Bay, the individual bills were not considered controversial. Most of the individual bills would either have reauthorized and in some cases modified existing CWA provisions that address water quality concerns in specified geographic areas, or would have established similar provisions for other regions or watersheds. The water quality issues and related 111th Congress bills are: Estuaries under the CWA's National Estuary Program (H.R. 4715), Chesapeake Bay (S. 1816), Columbia River Basin (S. 4016), Great Lakes (S. 3073 and S. 933), Gulf of Mexico (S. 1311), Lake Tahoe (S. 2724), Long Island Sound (S. 3119), Puget Sound (S. 2739), San Francisco Bay (S. 3539), and Monitoring water quality of coastal recreation waters (S. 878). The 111th Congress adjourned sine die on December 22 without taking up either the omnibus bill or individual measures that were included in S.Amdt. 4845. Whether the 112th Congress will consider some or all of these bills is unknown for now.